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After solid nominal spending growth in the first quarter, New Zealand’s retail card spending was weak in April. Retail spending fell 2.2 percent m/m, while core retail fell 2.3 percent. These data can be volatile, and the weakness is likely overstated.
Nonetheless, a moderation in the pace of monthly spending is evident. Over the year, core retail spending has moderated form 4.4 percent to 1.4 percent. Given that tourism and population growth have been contributing to increases in nominal spending, this paints a picture of modest per capita consumption growth.
The figure is down from a 1.5 percent m/m lift in March. Retail spending is growing at 0.8 percent y/y. Contributing to this was a 4.7 percent fall in nominal fuel spending, despite higher petrol prices.
'Core' retail ECT spending, which strips out motor vehicle-related spending, fell 2.3 percent m/m in April, with a 3.6 percent m/m fall in consumables. Core retail spending is growing at 1.4 percent y/y – a weak print.
RBNZ credit card data suggests that billings on overseas cards are up 14 percent 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.
"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," ANZ Research comments in its latest report.
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