Card use dips after two increases

Photo / Natalie Slade

Retail spending charged to electronic cards fell 0.8 per cent last month.

The decline, which is adjusted for seasonal effects, follows two months in which card transactions had risen 1.4 and 1.5 per cent.

Fuel purchases fell 4.1 per cent in a month in which average diesel prices fell 5 per cent and petrol prices 2 per cent. Core retail sales which exclude the automotive sector, were down 0.1 per cent.

Compared with May last year retail card transactions were up 6.8 per cent, or about 1.8 per cent in real terms (using the Reserve Bank's forecasts of annual inflation in the June quarter).

Spending on durables fell 1.1 per cent from April. ASB economist Christina Leung said the decline followed two months of solid spending in that category as Christchurch people replaced appliances damaged in the earthquake.

Spending on services, which had softened in the two previous months, rose 3.7 per cent.

Deutsche Bank chief economist Darren Gibbs said yesterday's data indicated some growth in retail volumes had resumed this year after the contraction seen during the second half of last year.

However, Reserve Bank forecasts released on Thursday have consumer spending growing only modestly over the next three years, constrained by high levels of household debt.