NZ: Card spending rose 1.4% in November - Westpac
|Michael Gordon, Research Analyst at Westpac, notes that New Zealand’s card spending rose 1.4% in November, partly due to higher fuel prices but with strong gains in the core retail categories as well.
Key Quotes
“Spending on debit and credit cards rose strongly in November, beating market expectations. In addition, spending in October was revised higher. Spending growth has picked up after a flat patch through the middle of 2017.”
“Retail card spending rose by 1.2%, beating even our top of the range forecast of 0.8%. The total was boosted by a 5% rise in fuel spending, which was in line with the rise in petrol prices over the month. Spending in the core retail categories rose by 0.8%, led by a 1.2% rise in both durables and hospitality, and a 2.7% rise in clothing.”
“November was filled with anecdotes of retailers increasingly adopting the US trend of 'Black Friday' sales. However, the jury is out on whether this leads to more spending or simply shifts the timing of spending.”
“One factor that may have contributed to the recent pickup in consumer spending is the link to housing wealth. House prices flattened out over the first half of this year but have picked up again in recent months, and card spending has more or less followed suit.”
“The strength of the housing market is a critical part of our outlook for the New Zealand economy. We expect that the new Government's policies aimed at cooling housing demand will see house prices fall slightly in 2018, which in turn would dampen growth in consumer spending.”
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