Spending with electronic cards was flat in May from April as people spent less on big ticket items such as furniture and appliances, although more on hospitality, seasonally adjusted figures released by Statistics New Zealand show.
The seasonally adjusted value of total electronic card transactions was down 0.1% in May 2011 compared with April 2011, Statistics New Zealand said. The value of transactions rose in five industry groups, but fell in three.
Core retail spending (which excludes the motor vehicle-related industries) was also flat, down 0.1% in May. This followed increases of 1.1% and 1.5% in March and April, respectively.
The biggest movements this month were in durables (down 1.1%) and hospitality (up 1.6 %). The durables industry includes furniture, hardware, and appliance retailing; and the hospitality industry includes accommodation, bars, cafes, and restaurants.
When the two vehicle-related industries are included, the value of transactions in retail decreased 0.8%. This decrease was led by fuel retailing (down 4.1%), its first fall since July 2010.
Meanwhile, unadjusted figures show core retail spending with cards in May 2011 was up 5.5% from May 2010.
Trends for the value of transactions in the total and retail series have been increasing since January 2009, and the rate of increase has been strong in recent months, Stats NZ said.
"The core retail trend has generally been increasing since the series began in October 2002, and the rate of increase has been fairly constant since December 2010," Stats NZ said.
The release included data for Canterbury. However, as the data is not broken down by region Stats NZ was not able to separate or estimate the impact of the recent earthquakes on the data, it said.
Economist reaction
ASB economist Christina Leung said the decline in retail spending was driven by lower spending on fuel, with the 4.1% decline in fuel in line with the decline in petrol and diesel prices over the month.
"Spending on apparel was also weaker, with the 2% decline likely reflecting the milder than usual autumn weather. In addition, the 1.1% decline in durables follows two months of solid spending in this category as households in Christchurch rushed to replace appliances damaged in the February earthquake," Leung said.
"Spending in the services industries shows encouraging signs of recovery, and we expect the Rugby World Cup later this year will provide a further boost to the tourism-related sectors," she said.
"May’s result follows some solid increases in recent months. Overall, recent developments indicate the recovery in retail spending is occurring at a gradual pace. The RBNZ had highlighted at the June MPS the continued high level of household debt, which will constrain retail spending over the coming years. Nonetheless, there are encouraging signs of an improvement in households’ discretionary spending.
"The release of Q1 Retail Trade Survey next Wednesday will provide more detail on retail spending over the first quarter of 2011, including a regional breakdown. This will provide a more accurate guide to retail activity than the monthly electronic card transactions report."
(Updates with ASB comment, chart)
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3 Comments
Any chance of overseas comparison, i.e. is overseas card spending up?
In times of increasing prices people buy now, as they expect things to get more expensive, when prices are stable or falling then the fear of goods being priced higher disappears and the consumer now is worried that they may pay too much today as it may be cheaper tommorrow, i.e. NZ$ up, imports cheaper.
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