Growth in retail spending is expected to be gradual. Photo / Natalie Slade
Growth in retail spending is expected to be gradual. Photo / Natalie Slade
Retail spending charged to electronic cards rose 0.3 per cent last month, to be 3.9 per cent higher than in March last year.
When the automotive sector is excluded - particularly fuel purchases, which dropped 2.5 per cent despite higher petrol prices - core spending charged to debit, credit andcharge cards was up 0.5 per cent.
But that only reversed a 0.5 per cent drop recorded in February.
For the March quarter as a whole core spending via electronic cards was 0.4 per cent higher than in the December 2011 quarter.
ASB economist Daniel Smith said spending in a couple of the more volatile areas rebounded from weak February results.
Hospitality spending, which was down 2.7 per cent in February, rose 2.1 per cent while apparel spending, down 2 per cent in February, jumped 2.6 per cent.
"The largest spending component, consumables, rose 0.5 per cent, continuing the recent trend of steady growth," Smith said.
"Meanwhile spending on durables fell 0.6 per cent. This may represent some payback following steady growth in spending on durables over the second half of last year, but we expect increasing housing market activity will support sales of durable goods over 2012." Goldman Sachs economist Philip Borkin noted that Statistics New Zealand's estimate of the trend rate of growth in spending via electronic cards was just 0.1 per cent a month.
That was tepid, he said, especially in light of recent increases in petrol and food prices.
Smith said that with a modest rate of economic recovery and household debt still high, growth in retail spending would continue to be gradual.
"We do not see this sector as a source of inflationary pressure in the near term. We continue to expect the official cash rate to be left on hold until the end of the year," he said.
