September continued the pickup for Paymark merchants. Underlying spending increased a further 1.0% between August and September, seasonally adjusted, marking a significant improvement since the slow months of May, June and July. In total, spending through Paymark was $4.9 billion in September and 5.2% higher than in September 2017 in underlying terms.
However, the annual growth rate in Auckland/Northland (3.6%), by far the largest region, remains lower than the rest of New Zealand, with the exception of Canterbury. Spending growth amongst the Auckland/Northland core retailers, where the majority of household spending occurs, is running slightly faster now than mid-year (5.1%) but this is still below the equivalent group in the rest of the country (6.8%).
Within the core retail group, spending growth has jumped sharply amongst Housing-related merchants since the slow months of May, June and July while spending at food and liquor stores has increased slightly. The first group has Auckland/Northland lagging the rest of the country slightly but it leads the second group (not surprisingly given population growth rates). It is amongst the hospitality merchants and the other core retail shops where Auckland/Northland is behind.
The causal factor amongst the Hospitality sector is likely to have been fewer visitors to Auckland/Northland in recent months. Spending amongst Accommodation merchants was running below year-ago levels in the winter months, as too were the guest arrivals reported separately by Statistics NZ. Paymark figures show Auckland/Northland Accommodation spending still down in August and September.
The pattern amongst the other core retailer sectors in Auckland/Northland is mixed: appliance and electronic stores (-16.9% Sep/Sep) are running well below year-ago levels; clothing and footwear shops (-1.4%) are down slightly; while pharmacies (+9.6%) are up strongly.
Beyond the core retail sector, spending amongst fuel merchants is higher, both in Auckland/Northland (+7.1%) and the rest of New Zealand (+12.5%), although the number of transactions is down slightly in Auckland/Northland (-1.7%) and up only slightly elsewhere (+2.8%), indicative of the higher fuel price in recent months.
Amongst other regions, the fastest annual underlying growth rates across all sectors in September were recorded by Palmerston North (+13.0%), Wanganui (+10.6%) and Gisborne (+10.2%), and the lowest by Canterbury (+2.8%).