Weak growth, tourism spend declines
Annual growth in overall card spending in New Zealand was just 0.3% year-on-year in July, signaling continued pressure on sales volumes, according to ANZ NZ’s latest Merchant and Card Spending Chartpack.
“Spending on durables, discretionary items, clothing, and housing-related categories remains particularly weak,” said Sharon Zollner (pictured above), chief economist at ANZ New Zealand.
Tourism and discretionary spending drop
Tourism-related spending has decreased by 3.5% year-on-year, with accommodation spending notably diving in the past six months.
“The international tourism recovery has flattened off, and business travel has been curtailed,” Zollner said.
Discretionary spending types, including restaurants and bars, continue to decline, with turnover now down 7% compared to last year.
Housing market and durable goods impact
Housing-related spending is down 4.4% year-on-year, reflecting the ongoing softness in the housing market and weaker construction activity. Despite this, some areas like car sales yards saw a seasonal lift in July.
“Durables spending may be finding a floor, but the pressure remains,” Zollner said.
Small bright spots amid weakness
While most categories saw declines, miscellaneous services and goods, including grocery stores and buy-now-pay-later services, showed positive growth.
“Growth in spending at pet shops never went negative and may be rising again,” Zollner said, indicating a few resilient sectors amid broader weakness in consumer spending.
Business spending remains cautious
Spending on goods and services for business purposes also declined by 2.2% year-on-year.
“Businesses are being careful with their spending, particularly on commercial equipment,” Zollner said.
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