New Zealand consumer spending on credit and debit cards rose for a third straight month in January, helped by purchases at petrol stations, underlining the economy's slow recovery from its slump.
The value of transactions on electronic cards at retailers rose 0.5 per cent last month from December, when they climbed 0.7 per cent, according to Statistics New Zealand.
Excluding spending at motor vehicle-related industries, transactions at core retailers fell 0.1 per cent.
Stripping out auto industries shows retailing's recovery is somewhat patchy. Consumer enthusiasm for spending is being tempered by a still-weak housing market, evidenced by Reserve Bank Governor Alan Bollard's view that a return to property boom conditions hasn't eventuated.
Warehouse Group, the biggest retailer on the NZX50, said last month that it didn't see the Christmas pick up it had hoped for, while rival Briscoe Group said annual profit almost doubled after strong Christmas trading fattened its margins.
"Today's numbers are again consistent with a stabilisation in consumer spending, but also an ongoing cautiousness from consumers," said Philip Borkin, economist at Goldman Sachs JBWere.
Recent data points to "a reasonably sluggish cyclical recovery," he said.
Borkin expects an improvement in consumer spending in the first half of 2010 but "the pace of recovery will need to pick-up from today's rates if real household spending is to meet our forecasts."
Spending on credit cards may increase as more kiwis rely on credit to pay for expenses they couldn't otherwise afford, according to Dun & Bradstreet's Consumer Credit Expectations Survey, released today.
The electronic card figures come a month before the government statistician releases its official measure of retail sales. While it cautions that the card data shouldn't be taken as an exhaustive measure of retailing, economists regard it as a useful leading indicator.
Retail sales probably rose 0.5 per cent in December and retail volumes rose 1.4 per cent in the fourth quarter, according to a Reuters survey. The retail report is due out on Feb. 12.
Fuel retailing was the biggest contributor to increased card spending for a second month, rising 2.6 per cent for an annual increase of 15 per cent.
The number of card transactions in January rose 4.7 per cent from a year earlier to 81 million.
Retail recovery still patchy, say latest stats
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