Spending up: Views of the opening of the new commercial bay shopping precinct in downtown Auckland. Photo / Alex Burton
Spending up: Views of the opening of the new commercial bay shopping precinct in downtown Auckland. Photo / Alex Burton
Kiwis are still on their post-lockdown spend up, latest card data from StatsNZ shows.
A rise in electronic card spending to record levels during July was boosted by sales of furniture, hardware, and appliances, Stats NZ said today.
"For a third consecutive month, card spending on the long-lasting goods (durables)remained at higher levels than last year," StatsNZ retail statistics manager Kathy Hicks said.
Retail spending on electronic cards rose by 1.2 per cent in July. That followed a solid gain last month.
Spending levels are up 11 per cent on the same month last year.
"Following the strong gain last month, that leaves monthly retail spending comfortably above pre-Covid levels," said Westpac senior economist Satish Ranchhod.
"Today's result signals healthy spending appetites in the New Zealand economy despite the headwinds."
Monthly spending was around 7 per cent higher than the levels prior to the outbreak of Covid-19.
While the initial rebound in spending after lockdown may have been due to some pent-up demand, the continued rise this month pointed to "surprising strength in households' spending appetites", Ranchhod said.
"In part, this may reflect that households have diverted funds earmarked for overseas holidays back into the domestic economy."
There was also a solid rise in spending on hospitality in July - up 8.9 per cent.
"That's likely to have been boosted by more New Zealanders taking domestic holidays," he said.
"This will have been a welcome development for many providers of hospitality services (like bars, hotels and restaurants) who are struggling with a lack of international tourists."
Pent-up demand, nest-building, the desire to support local, and the switch of funds destined for overseas trips had all supported retail spending and should remain supportive over the next few months, said ASB senior economist Mark Smith.
It had continued to "climb out of a deep hole" and hit a record high in July for both total retail and core spending, he said.
But the large economic toll imposed by Covid-19 meant that the retail rebound would likely prove to be short-lived, he warned.
The retail climate was likely to soften heading into Christmas.
"Weekly spending gauges indicate that some of the momentum in spending may be fading," Westpac's Ranchhod said.
Spending levels would also be challenged by the wind-down of the wage subsidy programme, said.
"However, at this stage it's looking like retail spending has been fairly resilient to the Covid-related headwinds buffeting the economy."
Meanwhile the ANZ Truckometer survey, which measures traffic volume as a barometer of economic activity, also showed ongoing strength.
Light traffic in the month of July was 9.5 per cent higher than the same month the previous year, while heavy traffic is up 10.2 per cent on year-ago levels.
Traffic is back running above 2019 levels. Photo / Jason Oxenham
There was still significant "noise" in the traffic data, cautioned ANZ chief economist Sharon Zollner.
"Volatility can be expected. However, the basic story is that New Zealand is back in business and enjoying a slight overshoot after the lockdown plunge," she said.
"Heavy traffic likely reflects a degree of restocking, and light traffic enthusiast domestic holiday-making, given the lack of alternatives."
There were already some signs that business and consumer confidence measures have started to wobble, she said.
"Traffic may also give up its overshoot in coming months. But the data certainly highlights how lightly New Zealand has gotten off in terms of disruption to everyday life for most people. Touch wood."
