New data suggests caution among New Zealand consumers

Source link: Fresh data suggests New Zealand consumer caution At a glance Seasonally adjusted card spending fell 0.4% in September from August; This figure had dropped by 0.9% in August. Real spending increased by 0.9 percent compared to September last year; In August, the annual growth was 0.2 percent. Food prices remained unchanged monthly in September, and the ratio […] Source site: Safir Arjan

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Retail spending with e-cards in New Zealand fell for the second consecutive month in September, although the actual sales figure was higher than last year. Data from Statistics New Zealand also showed food prices were unchanged from the previous month.

New Zealand factories are showing signs of recovery, but consumers remain cautious and stable food prices are only a limited relief to households.

Retail spending with e-cards fell in September for a second month in a row, while food prices were flat, Statistics New Zealand data released on Friday showed. This statistic indicates the caution of households; That too in a situation where other sectors of the economy are showing signs of greater mobility.

Retail spending by card, after seasonal adjustment, decreased by 0.4% compared to August. This figure decreased by 0.9% in the previous month. However, real and unadjusted spending increased by 0.9 percent compared to September last year; A growth higher than the 0.2% increase in August. E-card transactions cover around 68% of core retail sales and are an important monthly indicator of retail activity in New Zealand.

This statistic shows that consumers are still facing pressure. The monthly decrease in spending for the second month in a row could indicate that households are restricting discretionary purchases, while the annual increase in real spending remains limited. Because the card count measures the value of transactions, not the volume of goods purchased, some of the annual growth may be due to price increases.

In another part of the report, the food price index of Statistics New Zealand showed that prices in September did not change compared to August; This is despite the fact that a 0.3% increase was registered in the previous month. Food prices were 2.4% higher compared to a year ago. Food products make up nearly 19% of the weight of the consumer price index; Thus, holding prices in September removed one source of upward pressure on headline inflation that month.

Weak consumer data contrasts with a stronger picture from the manufacturing sector. The BNZ-BusinessNZ manufacturing index, released earlier on Friday, suggested the sector's activity expanded at a much faster pace in September. However, many companies cited fuel prices, cost of living and pre-election uncertainty among their concerns.

Overall, the data paint an economy where output and orders are improving, but household spending is lagging behind cost-of-living pressures. The cessation of monthly food price growth brings some relief; However, on its own it is unlikely to change the overall picture of household budgets, especially as long as fuel costs remain high.

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The data also paint a mixed picture for the New Zealand dollar: weakness in household spending has been offset by an improvement in the manufacturing index. The consecutive monthly decrease in spending points to the weakness of domestic demand; A factor that is usually not in favor of tighter monetary policy. In contrast, the cost of fuel - which manufacturers have identified as one of their main concerns - remains a more important factor for household budgets and the consumer outlook.

Upcoming retail sales and inflation data will show whether the weakness in card spending in September continues into the final quarter of the year; The pre-Christmas period typically creates a seasonal spike in demand.