KEY POINTS:
Retail spending via electronic cards was down again last month, providing little hope that tomorrow's release of retail sales figures for the key Christmas period will be positive news.
Statistics New Zealand's latest monthly electronic card transaction figures show the value of core, retail spending on credit, debit and charge cards in January fell by 0.2 per cent.
This followed a 0.2 per cent increase in December that was largely driven by sales of durable products such as television sets and whiteware.
The value of overall retail transactions, including fuel and vehicle-related spending, fell 0.6 per cent in January and was the third consecutive monthly decrease. The falling cost of filling the fuel tank is the main factor behind the decreases, but the figures indicate that savings made on fuel are not being spent elsewhere.
Statistics NZ has brought forward the release of the electronic card transactions (ECT) data each month, meaning the figures are released prior to the full retail sales information. Economists say this is a useful barometer.
The retail trade survey, due out tomorrow morning, includes cash, cheque and hire-purchase transactions as well as card spending.
Deutsche Bank chief economist Darren Gibbs said the ECT figures were soft in both November and December, "so I suspect there's a little bit of catch-up on the downside to come in the December retail figures".
He expects December headline retail sales to be down around 1 per cent, with core retail sales (taking out fuel and car sales) down about 0.3 per cent.
He said the October 1 tax cuts were still feeding their way through, and homeowners were starting to roll off fixed mortgages on to lower interest rates, so retail figures would "bounce around" in coming months.
"In broad terms retail sales are pretty flat, and that's what you would expect."
In its commentary on the figures, Goldman Sachs JBWere said the annual growth rate of spending on electronic cards was 2 per cent below the rate of price inflation. This suggested that volumes were contracting.
It said despite the Reserve Bank providing significant relief in the form of interest rate cuts, "there is no real evidence of a reversal in the trajectory of the recession yet".
