KEY POINTS:
A small rise in retail electronic card spending last month points to an only modest rise in consumer spending, one of the areas of concern to the Reserve Bank, economists said.
Electronic card spending was up a seasonally adjusted 1.1 per cent to $4.6 billion in May from April, Statistics New Zealand (SNZ) said yesterday. However, spending in the retail sector was up just 0.1 per cent for the month following a 1 per cent rise in April.
Core retail, which excluded motor vehicle-related industries, was down 0.4 per cent in May compared to April.
"The underlying trend in electronic card transactions continues to moderate," said Goldman Sachs JBWere economist Shamubeel Eaqub.
"This is consistent with the weakening consumer confidence thus far in 2007. We believe this reflects the impact of rising interest rates and petrol prices."
However, the outlook was mixed, with high employment, house price increases and import deflation likely to support spending despite rising interest rates and petrol prices, and slowing migration.
Retail sales fell 1.2 per cent in April following increases of 1 per cent and 2.3 per cent in March and February respectively.
Official retail spending statistics for May are published on July 13.
The trend in retail series was 6.9 per cent higher than May 2006. Until August 2006, the annual trend increase had generally ranged between 9 and 12 per cent, but had since remained below 9 per cent, SNZ said.
- NZPA
