Electronic card spending lifts

visa-mastercard-credit-card-amexTotal spending using credit and debit cards saw a 5.8 per cent increase to $4.8 billion in July, up from the previous month’s $267 million, Statistics New Zealand reported.

The largest increase was in the hospitality industry, up 18 per cent to $139 million, with the only decrease seen in the fuel industry, down $54 million, or 8.6 per cent.

When adjusted for seasonal effects, retail spending rose 0.3 per cent in July 2016 from June 2016. This follows a 1.2 per cent rise in June.

“People spent more on accommodation and on food and drinks in restaurants and takeaway shops,” said Neil Kelly, business indicators senior manager. “In contrast, they spent less on fuel, with petrol prices falling about 10 cents a litre in July.”

Of the six retail sectors covered, the largest movements in July 2016, compared to June 2016, were: hospitality, up 2.9 per cent to $26 million; fuel, down $21 million, 3.6 per cent; and core retail spending (which excludes the vehicle-related industries) rose 0.7 per cent in July 2016, after a 1.1 per cent increase in June.

The total value of electronic card spending, including the two non-retail industries (services, and other non-retail), was up 0.4 per cent in July. This follows a 1.0 per cent increase in June 2016. Trends for the total, retail, and core retail series have generally been rising since these series began in October 2002.

Satish Ranchhod, Westpac senior economist, said July saw some pull back in spending on durables and apparel spending.

“That was to be expected after earlier sharp increases, and this doesn’t detract from the overall positive tone of the report,” Ranchhod said.

Ranchhod added spending has been boosted by low interest rates, strong tourist inflows, and population growth. Households’ purchasing power has also been boosted by falls in petrol prices, which have put money back into households’ wallets.

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