Too soon for spending

Tony Alexander. Photo / Supplied

Our latest BNZ Confidence Survey shows that although current retailing conditions remain tight there are more signs of increased spending now than there have been for some time.

But we think it is premature to start speaking in terms of good retail spending growth as it is highly likely that New Zealand households will continue with the same behaviour we are seeing for consumers in the United Kingdom, United States, and even in fast-growing Australia.

That is a strong focus on debt repayment, which across the Tasman has seen the household savings rate rise to its highest level since the mid-1980s, near 10 per cent. Christmas spending is likely to be average at best.

* Tony Alexander is BNZ chief economist.