Consumers loosen wallets in November

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New Zealand consumers loosened their hold on their wallets last month, spending more on credit and debit cards amid signs that the economy is improving.

Seasonally adjusted electronic card transactions at retailers rose 1.1 per cent in November, after climbing 1.2 per cent in the previous month, according to Statistics New Zealand.

Spending was led by 1.4 per cent increase in retail transactions.

Core retail spending, which excludes motor vehicle-related industries, rose 1 per cent.

"The core retail trend has been rising at a monthly average of 0.6 per cent since March 2010, following a year of lesser growth," the department said in a statement. "The retail and total trends have both strengthened since July 2010."

The monthly increase suggests that consumers' spending patterns are returning to normalised levels as the economy edges towards recovery, and not just a fluke related to the October increase in sales tax to 15 per cent from 12.5 per cent previously.

This was reinforced by data showing that credit cards accounted for a greater portion spending in the month, at 44.4 per cent compared with 42.4 per cent in October, indicating that consumers

November card spending in the retail sector was led by a 3.1 per cent increase in durables, which includes furniture, hardware, and appliance retailing, and follows a 6 per cent decline in the fall in October.

Fuel retailing rose 3.7 per cent in the month.

The share of electronic card transactions in retail industries has been slowly increasing over time, with the mean share of retail spending for the year to June 30 estimated at 61.4 per cent compared with 60.8 per cent in the previous year and 58.8 per cent in the 2008 year.