Consumers putting more on the plastic

The rise in card use last month contrasts with sluggish January and February spending. Photo / Dean Purcell

Consumers flourished the plastic with a bit more gusto last month, electronic card transactions data out yesterday suggests.

Statistics New Zealand said retail spending charged to credit and debit cards in March, which covers about 60 per of retail spending, was up 2.1 per cent on February, seasonally adjusted.

Excluding the automotive sector, card-financed spending was up 2.2 per cent, the strongest monthly increase since November 2004.

The jump in spending contrasts with sluggish numbers for the preceding months. There was no net increase in retail spending charged to cards during January and February, while in the core retail sectors the value of electronic card transactions went backwards.

The biggest increases last month were in spending on durable goods and on services.

Compared with March last year, transactions were up 7.3 per cent for all retail transactions and 7.2 per cent for the core retail sector, the strongest annual increases since May 2008.

Deutsche Bank chief economist Darren Gibbs said the report suggested growth in consumer spending was accelerating, though he suspected the early Easter pushed more sales into March than usual.

"Core sales grew 0.9 per cent in the three months to March, the strongest growth since mid-2009."

Goldman Sachs JBWere economist Philip Borkin said some of the increase was likely to be statistical "payback" from the weak numbers in January and February.

"Yet the rate of growth in March is far in excess of the weakness experienced in the first two months of the year. Something else is also contributing," he said.

"History has shown that spending, particularly on big-ticket items, is brought forward prior to any changes in GST."