New Zealand retail spending on credit and debit cards rose at its fastest pace in seven months in May, with gains across all six retail industries measured.
The value of retail spending on electronic cards rose a seasonally adjusted 1.3 per cent in May from a 0.4 per cent pace in April and no change in March, Statistics New Zealand said. That was the fastest pace since a 1.8 per cent increase in October.
Spending appears to have picked up, having dropped off earlier in the year as consumer sentiment was hurt by a slowdown in the housing market and higher credit costs after mortgage lending restrictions introduced by the Reserve Bank in October started to bite and as the central bank began a cycle of interest rate hikes in March. Electronic card transactions account for about two-thirds of all retail spending.
"The solid increase in retail spending in May reflected continued high levels of consumer confidence, which helped to support spending in discretionary areas such as hospitality. Meanwhile, population growth is driving increased spending on necessities such as groceries," ASB Bank economist Christina Leung said in a note.
"We expect continued positive developments, such as an ongoing recovery in the labour market, will encourage further growth in consumer spending over the remainder of 2014."
