Kiwis still aren’t spending much—but at least they’re having more fun with their money
Overall spending growth through the Paymark electronic network was low—as it has been all year. Polls may claim improved consumer confidence but it’s yet to show as any great boost in the New Zealand stores.
Dig a little deeper, however, and spending patterns are changing. Combine spending through various sectors to reflect wider household driving forces and the big change is in more spending related to housing (‘we can build it’), consistent with the lift in house sales. In the September quarter spending through the likes of hardware and furniture stores was 3.2 percent up on the September quarter in 2008; earlier in the year the trend was downward.
The key drivers are probably the mix of low interest rates and high net inward migration. But there is also some pressure coming off the household budget as food and petrol inflation reduces. Spending on these two core items (‘because we have to’) is now reducing faster than earlier in the year.
Paymark can also see an upward shift in other discretionary spending in outlets such as beauty salons, dentists, florists and drycleaners (‘because we can’), showing confidence is more than just talk—although there is probably plenty of that, most likely over a drink and a meal, judging by the continued growth in spending at venues such as hotels and cafes (‘let’s go out’).