There’s a hint of improvement in recent Paymark statistics—like more spending at beauty clinics and dentists, two typical targets of discretionary income—but the pattern of recent months has been for pockets of spending to emerge only to dissipate a few weeks later.
There’s little to suggest that pattern has been broken yet. The bigger picture remains that we are continuing to use our debit cards more (and our credit cards less) but the growth rate has not accelerated significantly since early 2009, even when Canterbury and South Canterbury are excluded from national figures.
In terms of dollars being spent using cards, the annual growth rate in the three months ending May (May quarter in the graph) is higher now than a year ago, but that appears largely due to price effects, including higher GST and food prices in the past 12 months.
The end result is that we’re spending more money just to feed the family, resulting in continued budgetary pressure. We still use our cards more at cafes (is a flat white now an essential?) but the decline in overseas tourists is partially offsetting this force, and leading to spending declines among accommodation providers.
Meanwhile, there may have been extra dollars for clothes in April and beauty therapists in May but there was little to show in household big-ticket spending patterns that a more general income boost is occurring. Furniture stores, for example, are still running below year-ago levels.
And the good news? We did spend more at museums, libraries and gyms in May and less at amusement arcades and gambling outlets. Perhaps that’s just another fad, though.
Anthony Byett is an economist who consults to Paymark, new Zealand’s largest eftpos provider