NZ: Retail spending on electronic cards fell 2.2% m/m in April - ANZ

Liz Kendall Senior Economist at ANZ notes that New Zealand’s retail spending on electronic cards fell 2.2% m/m in April (seasonally adjusted), which is down from a 1.5% m/m lift in March.

Key Quotes

“Retail spending is growing at 0.8% y/y. Contributing to this was a 4.7% fall in nominal fuel spending, despite higher petrol prices.”

“Core retail ECT spending, which strips out motor vehicle-related spending, fell 2.3% m/m in April, with a 3.6% m/m fall in consumables. Core retail spending is growing at 1.4% y/y – a weak print. ECT data can be volatile, and the weakness is likely overstated. Nonetheless, a moderation in the pace of monthly spending is evident. Data in coming months will give an important steer on the signal in today’s seemingly weak print.”

“Tourism and population growth have been contributing to spending growth. RBNZ credit card data suggests that billings on overseas cards are up 14% y/y. Tourism probably accounts for a modest portion of total card spending, but has increased strongly, and will have contributed to nominal spending growth. Short‑term visitor arrivals have increased almost 40% since 2014 – and were up 13% over the year to March. Likewise, immigration remains strong, with an inflow of 68,000 people over the year to March, contributing to spending growth.”

“Today’s data thus paint a picture of modest per capita consumption growth. Households are constrained by high debt levels and housing affordability concerns. We expect households will be looking to rebuild their saving buffers over the medium term, with perhaps some boost to consumption later in the year from Government policies.”