KEY POINTS:
Falling petrol prices drove the value of electronic card transactions in November to its biggest monthly decline since monitoring began in 2002.
Statistics New Zealand figures show the total value of transactions fell 2.8 per cent in November compared with October 2008 when seasonally adjusted.
Statistics NZ said the fuel retailing industry had been the main driver with November coinciding with a substantial drop in fuel prices. Growth in card transactions had been falling since August and was now almost flat.
Total retail transactions were down 2.3 per cent although falls in hospitality and durables were offset by a rise in the consumables industry. But even when petrol was out of the equation there was still a drop in the value put on credit, debit and charge cards.
Core retail transactions, which do not include fuel, were down 0.5 per cent in November continuing an easing trend since August.
In total there were 88 million transactions in November in which $4.8 billion was spent, compared with November 2007 when there were 85 million transactions also with a value of $4.8 billion.
While the month-on-month value was down, Deutsche Bank chief economist Darren Gibbs said the November quarter had seen an increase on the previous quarter and showed improving consumer confidence.
He predicted a 1.7 per cent month-on-month decline in the value of December transaction figures but said consumer confidence surveys would reveal whether anecdotal evidence of an improvement in retail spending had actually produced a change.
"We will be interested to see the first consumer confidence surveys for 2009 in light of the anecdotal improvement in retail spending in late December and the further petrol price reductions around the same time."
Gibbs said nothing over the holiday break had changed his view that the Reserve Bank was likely to cut the official cash rate by a further 75 basis points to 4.25 per cent on January 29.
"We see some risk that a smaller cut of 50 [basis points] is implemented if economic sentiment improves over the remainder of this month.
"Whilst a larger cut is also possible ... we think the RBNZ will want to retain ammunition to inject 'good news' as the year progresses if signs of stabilisation in the global economy are not forthcoming."
