Consumer confidence growing – Stats NZ

Consumers appear to be loosening the purse-strings, suggesting any post-election nerves have now well and truly settled.

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Official figures from Statistics NZ show retail spending using electronic cards rose by one percent from February – twice the expected growth of 0.5 percent.

Spending on alcohol and groceries led the way, growing by 2.9 percent, while bars and restaurants also got in on the act with spending on hospitality up by nearly 1.4 percent.

ASB Bank senior economist Mark Smith said consumer confidence was growing and showing no sign of slowing.

“Core spending was at its strongest in about 18 months so we‘re certainly seeing consumers becoming more confident and translating that confidence into spending.

“Card spending is running at an annualised rate of around 10 percent, so very very strong.

“Core spending‘s at around six percent. Consumers can‘t continue to grow spending that quickly and it‘s likely to be bound by income growth.

“We expect income growth to remain positive over 2018 so we‘re looking at spending growth of around five to six percent over the year.”

However, Mr Smith said any trade war could upset consumer optimism.

In addition, the hospitality sector saw a big boost in February, largely due to Chinese New Year.

The number of international guest nights rose by 6.6 percent from February 2017, because of an influx of tourists.

It‘s the first time international guest nights have surpassed domestic guest nights in eight years.

The biggest increases were seen in Christchurch, Queenstown-Lakes, Southland, Dunedin and Kaikoura – reflecting recovery from the November 2016 earthquakes, Statistics NZ said.