Outlook for New Zealand’s consumer spending positive in future

New Zealand economy's spending is expanding at a strong rate. Retail spending on cards grew 0.7% in February, while core spending, excluding fuel and volatile motor vehicle categories, grew 1.2%. Rise in February comes on top of previous gains. Retail spending grew 5.9% y/y in February.

Delving into details, strong growth in spending was sees in consumables and hospitality. This was mainly due to the very strong tourist season. The country also registered spending gains on durables and apparel retailing. Declined petrol prices were one of the main factors leading to increased spending in February. Meanwhile, spending in non-store retailing and on services was slight weak.

Overall, there is a picture of continued strong spending by New Zealand consumers and tourists in the past one year. There is a positive outlook for spending in the future. Strong growth in population, low inflation and very low borrowing rates are all giving a boost to consumers. With strong tourist arrivals, retailers will look at a strong year ahead.