Card spending down 3% in Feb; slumps from 10% growth since 2006

The unadjusted value of electronic card transactions in February fell 3% from February 2008, data released by Statistics New Zealand shows. There was NZ$4.42 billion worth of transactions recorded over the month, down from NZ$4.55 billion in the same month a year ago. Year-on-year February growth for unadjusted values in the previous three years averaged at just under 10%. Unadjusted February spending was also down 4% from NZ$4.62 billion in January. This was a bigger fall than those in the previous four years (average fall: 1.9%), the highest of which was a 2.5% fall between January and February 2007. Despite the fall in the value of transactions, the total volume of transactions in February was 81 million, the same as in February 2008. However, over the previous three years, February year-on-year transaction volumes had been growing at just under 10%. These figures reinforce perceptions of a sharp slowdown in retail spending and will support any Reserve Bank moves to further boost the economy with another big interest rate cut on Thursday. Economists are expecting the RBNZ to cut the Official Cash Rate by between 50 to 100 basis points to as low as 2.5%. Volumes in February from January were down 7%, compared to falls of 2% in 2008, 4% in 2007, 4% in 2006 and 5% in 2006. Seasonally adjusted figures for transaction values showed a 1% increase in the value of transactions from February 2008, with a very slight increase from January.