Spending on cards up slightly: Paymark

WELLINGTON: Retail spending using electronic cards was only 1.2% higher nationwide in the first seven days of December than in the corresponding week last year, according to Paymark, which processes more than 75% of New Zealand card transactions.

However, it suggests this is

‘‘a pause before another rush’’ and that the Black Friday sale in November may have brought spending forward.

Meanwhile, Westpac’s economists are suggesting the recent fall in petrol prices ‘‘should mean a little more left in consumers’ wallets for other spending’’.

Paymark says the $1.2 billion in spending in the first seven days of December was 10% higher than the average weekly spending between January and October this year.

Compared with spending in the corresponding week last year, it was highest last week in Palmerston North, up 7.5%, and Southland, up 6.4%, but low in Auckland and Northland, up just 0.1%, and negative 1% in the Wairarapa.

‘‘Typically, spending builds through the last two weeks of November and the first week of December, then ramps up rapidly in the last couple of weeks ahead of Christmas Day,’’ Paymark said.

‘‘This year, the three weeks were again busy but spending in the week of Black Friday was slightly above that of last week,’’ it said.

It predicted a surge was still to come.

‘‘In the week ahead, we are likely to increase our buying at department stores, recreational goods shops, electrical shops and clothing stores by 10% to 25%, only to step up even further in the last few days before Christmas.’’

Paymark said in the seven days before Christmas, it expected an 80% to 180% rise compared with the average week between January and October.

It also expected spending at food and liquor merchants would rise 60% to 70% above average in the seven days before Christmas.

Westpac said it expected a temporary improvement in the housing market due to recent falls in mortgage rates and the loosening of the Reserve

Bank’s loantovaluation restrictions from January 1.

Westpac cut its twoyear fixed mortgage rate from

5.5% to 4.79% in September and also has a ‘‘special’’ offer of 4.29%.

‘‘The improvement in the housing market is likely to be felt particularly acutely in Auckland,’’ the bank said.

‘‘The Auckland housing market has been treading water since mid2016, so even a modest lift in prices could generate a bit of momentum in consumer spending in the region.’’

Westpac noted that oil prices peaked in early October, Brent crude rising above $US86 a barrel but that had since dropped to about $US60.

The New Zealand dollar had also risen over that period, helping to make petrol prices cheaper.

‘‘With petrol costs gobbling up a smaller share of household budgets, there should be a little extra left to spend in other areas,’’ the bank said. — BusinessDesk