Card spending up 0.6pc in May

By Ben Chapman-Smith

Kiwis spent $25 million more on fuel last month using their cards. Photo / NZH
Kiwis spent $25 million more on fuel last month using their cards. Photo / NZH

New Zealanders spent more using debit and credit cards last month, with the biggest increases in fuel, food and liquor, and hospitality spending.

Statistics New Zealand figures showed the total value of card spending rose by 0.6 per cent between April and May, from $5.74 billion to $5.78 billion.

The most significant jump came in fuel spending, which rose 3.8 per cent ($25 million) to $697 million. ASB economist Daniel Smith said the increase was probably due to a rise in petrol prices over the month.

Kiwis spent $16 million more on consumables, which includes food and liquor retailing, and $10 million more in the hospitality sector.

Statistics New Zealand spokesperson Blair Cardno said both fuel and consumables had posted a turnaround from April, when the industries fell 1.6 per cent and 2.2 per cent respectively.

"Most of the remaining retail industries either had small rises or small falls in May," he said.

"Trends for the total and retail series both remain positive. The core retail trend is also positive, but the rate of increase has eased since late 2012."

Core retail spending - which excludes the motor vehicle-related industries - increased 0.4 per cent to $3.55 billion in May, once seasonal effects were accounted for.

The value of electronic card spending in the retail industries - which includes core retail spending and motor vehicle-related industries - increased 0.5 percent to $4.37 billion.

Statistics NZ, whose figures capture around two third of the nation's total retail sales, said there were 112 million transactions last month, with an average value of $51.

ASB's Smith said the increase in retail card spending was in line with the bank's expectations.

"Electronic card transactions data continue to point to solid growth in retail spending."

He said three things should continue to support growth in retail spending; an improvement in consumer confidence, a turnaround in net migration flows and house price increases.

"Further increases in house prices have the potential to spur greater growth in consumption," Smith said.

Westpac senior economist Michael Gordon said the increase in card spending was larger than expected, "though not meaningfully so".

The bank had estimated a 0.3 per cent increase, based on an assumption that the early Easter this year had boosted the level of spending in April, and would consequently limit the rate of increase in May.

"Consumer spending has continued to grow steadily this year, and like many other indicators, there's been no real evidence of knock-on effects from the drought earlier in the year," Gordon said.

Hospitality spending had risen by nearly 5 per cent in the last three months, which Gordon said reflected "a marked pickup" in tourist arrivals over that time.

Paymark, which processes about 75 per cent of all electronic transactions in the country, yesterday said total spending through its network rose 0.1 per cent from April to May.

Takeaway outlets, cafés and restaurants benefited most from the increase, the company said.

Paymark said card spending had grown 5.1 per cent in the past 12 months.

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