Kiwibank: Spend-up tapering off

“The post-lockdown sugar-rush has finally come to an end,” says Kiwibank economist Mary Jo Vergara.

“The splurge in spending over the second half of last year lasted much longer than expected. But now we have seen a pullback.”

Kiwibank’s Household Spending Tracker report for the March 2021 quarter showed domestic spend declined 9 per cent in the March quarter, the first decline since the first lockdown ended.

The details showed most highlevel spend categories were on a downtrend. Demand for home furniture, electronics and hardware appears to have peaked in the December quarter.

Household-related spend fell 21 per cent in the March quarter. Prospects of a travel bubble may have spurred some people to resume planning and saving for trips overseas.

Spending unavoidably took a hit when Auckland was twice put under level 3 lockdown, she said.

Restaurant spend plateaued, as “dining in” was prohibited. Spending on fuel dropped as Aucklanders worked from home, and travel to the regions was limited to essential only.

But the spend had since rebounded in Auckland as the city bounced out of the level 3 lockdowns.

“The America’s Cup was a godsend for Auckland’s hospitality scene,” she said. Despite that many businesses in the CBD continued to struggle.

Kiwibank’s Household Spending Tracker tracks spending data through Kiwibank’s own electronic transaction data. On an annual basis, spending was up 41.8 per cent, although could be inflated because of a shift away from cash, Vergara said.

Meanwhile, preliminary ANZ Business Outlook data for April showed business confidence fell 4 points to -8 per cent, although their own activity outlook was unchanged at 16.4 per cent. The proportion of firms reporting higher employment than a year ago fell 2 points.