Spending on cards climbs again

Retail card spending climbed for a fourth consecutive month in August, but the growth is expected to slow with consumer confidence down sharply.

Statistics New Zealand’s latest figures show retail spending reached $4.5 billion, up a seasonally adjusted 0.5 per cent from July.

Vehicle-related industry spending had fallen, with fuel taking the largest drop due to lower prices, said business indicators senior manager Neil Kelly.

Increased card spending in the core retail industries had kept overall values up, he said.

Excluding the volatile vehicle industries, core spending was up 0.9 per cent.

Westpac senior economist Satish Ranchhod said the result was impressive, given spending earlier in the year was boosted by low petrol prices and a strong tourist season.

"While high levels of migration and strong tourist demand continue to provide support, over the coming months we do expect to see some softening in spending growth," he said.

That was due to a sharp fall in consumer confidence, and a probable softening in economic growth.

Ranchhod said the decline in the New Zealand dollar in recent months would also push up prices of imported goods.

On Thursday the Reserve Bank cut the official cash rate to 2.75 per cent, as expected.

Governor Graeme Wheeler slashed the bank’s expectations for economic growth in the coming year, saying it "seems likely" there will be more cuts in the near future

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