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New Zealand retail spending hits record high

New Zealand retail spending hits record high

WELLINGTON: New Zealanders spent a record $6 billion shopping in December, the highest ever monthly figure recorded by Statistics New Zealand. Shoppers swiped their electronic cards and spent $304 million more than throughout December 2014, an increase of 5.3 per cent.

However, when adjusted for seasonal effects, retail spending was down 0.2 per cent in December 2015, following a 0.2 per cent rise in November 2015. Business indicators manager for Statistics NZ, Clara Eatherley, said hospitality spending had the biggest increase.

“While card spending was up in five of the six retail industries in December, a significant fall in the durables industry has lowered overall card spending in the retail sector.” Trends across the spending in retail sectors have generally been rising since Statistics NZ began monitoring in October 2002, but appear to be easing in recent months.

The New Zealand dollar was trading at US65.11c at 11.30am, down from US65.22c at 8am and US65.61c at 5pm yesterday. The electronic card spending figures were released by Statistics New Zealand at 10.45am. Last week, Paymark indicated a strong growth in spending in December, citing a growth of 8 per cent compared to December 2014.

Paymark pointed to a number of factors behind the overall increase in spending, including the Reserve Bank cutting the OCR, which flows on to lower mortgage rates, as well as continued GDP growth. Westpac economist Anne Boniface said a slowdown in retail spend was expected this year and regions could suffer.

“Retail spending has trucked along at a pretty solid pace over the course of the last year, supported by strong growth in house prices, a large net inflow of migrants, and solid tourist spending. As we head into 2016 we expect the pace of retail spending will gradually start to slow.

“Regional centres may feel the impact of ongoing belt tightening by farmers, while in Auckland the slowing housing market may prove a headwind for retail spending.” Kim Mundy, economist at ASB, said the bank expected spending to remain modest throughout the year.

The strong Christmas spend up had contributed to New Zealand’s largest listed retailer Warehouse Group forecasting a 15 per cent to 21 per cent lift in first-half net profit. Adjusted net profit after tax for the six months ending January 31 is expected to range between $43 million and $45 million, the board said in a statement this week.

The ANZ Truckometer, a measure of economic activity using heavy traffic data, recorded few signs of any holiday pit stop in December. The ANZ Heavy Traffic Index lifted 2.6 per cent in December, completing a strong quarter. Annual growth in the index continued to rise and was running at 4.8 per cent.

“Santa may have swapped his sleigh for a few 44-tonners this year,” said ANZ Senior Economist Sharon Zollner. “The Heavy Traffic Index suggests the economy accelerated further in December, rounding out a strong rebound after a dip in the road mid-last year.