Retail spending grows less than usual in March, says BNZ

Retail spending rose in March but by less than usual for the time of year, according to data released today by the Bank of New Zealand (BNZ).

BNZ said spending by its debit and credit card holders rose 7.6 per cent in March compared to February. The bank said the average March spending rise since 2002 was 8 per cent.

Easter accounted for some of the easing. The Easter break fell in April last year, but March this year.

BNZ's report is based in eftpos transactions by its customers, which it said captured about 14 per cent of the country's retail spending.

The bank said consumer spending had been surprisingly strong in the first part of this year, and it was not unusual to see a small correction in March.

"Spending has been well supported by rising house prices, high job security, accelerating wages growth, and maybe even the delayed summer which shifted some spending out of December," the bank said in a commentary.

BNZ said it expected short term retail conditions to remain firm, but sales growth to fall slightly below average over the course of the year. The bank cited a number of factors for this including: higher interest rates kicking in, a slow down in house construction and a fall off in net migration.

Looking at regional retail spending trends in March, BNZ said Manawatu/Wanganui, Wellington, Canterbury, Otago and Southland all performed well. Spending restraint was evident in Auckland, Bay of Plenty and the West Coast.

Statistics New Zealand is due to release retail sales figures for February on Thursday.

- NZPA