Areas of South Island show good retail spending growth
PARTS of the South Island are still showing good retail spending growth, although Canterbury is showing signs of weakness, Paymark figures released this week show.
Nelson, the West Coast, South Canterbury, Otago and Southland grew more than most of the North Island centres in June.
Marlborough was the star, growing at 13% in transactions and 9.4% in value.
Canterbury grew 4.3% in both transactions and value.
Otago transactions grew 7.3% to 5.69 million and by 5.6% in value to $256.9 million in June.
Southland’s transactions grew 8.3% to 2.2 million and the value grew by 7.5% to $103 million.
Paymark spokesman Paul Brislen said petrol prices had increased for many Aucklanders this week as the regional petrol tax came into effect.
Pump prices had already been rising before July 1 due to rising international oil prices, and appeared to be having an effect on wider spending patterns.
Otago Chamber of Commerce chief executive Dougal McGowan told the Otago Daily Times the South Island had for a long time been paying prices much higher than those now being paid in Auckland.
‘‘Once we have people paying more for fuel, it usually means less spending on other things.’’
The rising fuel prices could be offset by the increase in the minimum wage and the new family package announced last week by the Government, he said.
In Otago, some centres were still busy with visitors even though the main tourist season had ended. But businesses in the region were not as confident about their futures as they once were, Mr McGowan said.
Wage costs were rising above the rate of inflation and skills shortages were cutting deep.
‘‘We will be going through an interesting stage in the next six to nine months.’’
Asked about the ongoing strength in regional spending compared with some others, Mr McGowan said Otago had a good month with events such as the All Blacks test match, the winter festival in Queenstown and the early start to the ski season.
Paymark total transactions reached nearly 105 million in June, accounting for $4.8 billion of spending on goods and services across the country.
Mr Brislen said when large merchant entries to or exits from the network were excluded, the underlying growth was a moderate 4.4% since June last year.
Further excluding fuel merchants, the annual growth rate was even slower.
For the second month in a row, AucklandNorthland experienced the slowest annual underlying growth.
Wellington and Canterbury also recorded belowaverage spending growth rates.
Spending among Paymark fuel merchants accounted for $419 million of total spending in June.
‘‘The higher petrol prices of late show as a higher average spend per transaction among these merchants.
‘‘The higher petrol prices now appear to be acting as a dampening influence on spending among other merchants, judging by the low exfuel annual growth rate recorded in June. And that’s before the price hikes of this week.’’
More generally, the spending pattern was of moderating growth, Mr Brislen said.
Reviewing annual underlying growth rates from recent quarters, spending was up 3.8% in the latest June quarter. However, that represented a marked decline from the 6.1% rate four quarters earlier.