Recent spending is a picture of restraint
Cash is king, so the saying goes. If that’s the case, we are not feeling too regal at present, especially come the 20th of the month. Spending through the Paymark electronic network was slow near this payment cutoff in April and May. It’s not that we are any less confident about the future, according to surveys, but the reality is we have to pay the bills today.
There is no doubt that cash is generally tight at present. There was also wet and cold weather to keep shoppers indoors in late May but this only worsened the slowdown rather than caused it. The combination of events meant that by the end of the month total sales, excluding petrol stations, through the Paymark network were below year-ago levels, a rare event that brings back memories of mid-2008.
Not that all sectors weakened; spending through outlets typically associated with home building and improvement did increase—and accelerate—albeit from a low base. This momentum had established before the Budget but the planned GST hike can be expected to bring forward the purchase of large-ticket items for the house in the couple of months ahead.
Elsewhere we continue to increase spending on the basics, especially petrol, and we are still keen on our meal out, even if it is only takeaways, but the more discretionary spend at the likes of music and book shops and hairdressers has been reined in a notch once again.