New Zealand’s electronic card transactions rise more than expectations in October

New Zealand’s electronic card transactions spending rose more than expectations in October with widespread gains throughout categories. ECT spending grew 0.6 percent in October as compared with the consensus expectation of 0.4 percent. ECT spending had rebounded strongly in September and the October data is doing well to keep building on that, noted ANZ in a research note.

Core spending was up 0.3 percent in sequential terms, as compared with the 2.3 percent rise in September. Gains were widespread in October. Durables dropped 0. 7 percent sequentially following a solid September; however, every other category rose. Hospitality and other car sales have increased particularly robustly in the last couple of months. Fuel retailing rose 1.1 percent sequentially.

It is evident that consumers in New Zealand are feeling quite good. In the September quarter, the total retail spending growth actually weakened slightly to 0.8 percent in sequential terms. This partly shows the effect of lower petrol prices in the third quarter. The data for October marks a robust start to the December quarter, added ANZ.

Strong labor market and house price gains are underpinning retail spending; however, consumers have been showing more restraint than during previous periods of strong house price gains. This is an important part of why the current account deficit continues to be curbed.

“We are assuming this restraint will continue, not least because the latest round of LVR restrictions appears to be making a decent dent in the housing market. But with retail sales growth lifting from 5.0 percent to 5.7 percent this month (core 6.7 percent), we’re keeping a close eye”, said ANZ.