Electronic card spending rises

New Zealanders are headed back to the malls, latest spending figures indicate.

New Zealanders are well and truly dusting off their plastic cards and heading back to the marketplace.

Electronic card spending rose a seasonally adjusted 0.7 per cent in May, prompting one economist to say our spending habits are on the rise - something retailers will be relieved to hear.

Increases were noticeable in consumables including food, liquor and pharmacy goods.

Last month's increase follows a rise of 0.8 per cent in April which was the strongest rise since last October, Statistics New Zealand (SNZ) figures released today show.

The core retail sector, which excludes vehicle-related industries, was up a seasonally adjusted 1.6 per cent last month. That was the third consecutive monthly increase and the highest rise since last July, which was also up 1.6 per cent.

Despite a fall in vehicle fuel sales, retail transactions rose 0.9 per cent in May, the fourth consecutive monthly increase and the highest rise since last October.

The figures are based on transactions made with credit and debit cards, and SNZ said that in May debit card usage reached its highest proportion since the series began at 56.9 per cent.

Deutsche Bank chief economist Darren Gibbs said that in broad terms today's data indicated consumer spending was beginning to recover.

That was thanks to the combined impact of past easing of monetary policy, aggressive fiscal stimulus and rising net migrant flows.

Given the monetary stimulus that remained in the pipeline, as people continued to refinance onto lower mortgage rates, he expected growth in retail spending to pick up a little further as the year went on.

But given the pressure on households to rebuild balance sheets and concerns about job security he would be surprised to see growth rebound strongly.

- NZPA