Businesses may be in for a pleasant surprise in the next few months judging by the spending patterns through Paymark in recent weeks.
Rather than follow the gloomy path of business expectations, consumers picked up their pace of spending in August. Underlying spending through Paymark increased 1.4% in total and 1.1% once transactions at fuel outlets were excluded.
Fuel prices have risen sharply in Auckland and other centres in the last couple of months, pushing the value of fuel transactions higher but this – and all the talk of lower business confidence – has not deterred consumers from spending elsewhere.
Spending through Paymark totalled $5.1 billion in August. In underlying terms, the value of these transactions was 6.5% higher than in August 2017, a marked improvement on the 4.6% p.a. averaged in the first seven months of the year.
The annual underlying spending growth hit double digits again for a month amongst housing-related merchants – for the first time since July 2016. The 10.1% August-to-August growth rate was well above the 4.8% annual growth rate averaged so far this year amongst this merchant grouping. Within this group, growth rates ranged widely from Hardware stores (+14.9%) and Garden centres (+8.2%), down to Floor covering outlets (+2.3%) and Furniture stores (+1.2%). Spending growth was especially high in the 7 days ending 13 August and highest amongst the smaller regions, although Auckland/Northland (+9.0%) housing-related merchants were also strong, even if ranked towards the bottom.
Amongst other big-ticket sectors nationally, Marine Equipment centres (+10.1%) and Appliances stores (6.9%) experienced fast growth while Electronics shops (-7.9%) did not. Two notable sectors that are still experiencing low payments growth through Paymark are Accommodation (+1.4% p.a.) and Clothing and footwear shops (+1.1%).
It was the smaller regions that also recorded the highest growth rates across all sectors. Fastest annual underlying growth rates in August were recorded by Gisborne (+11.5%), Palmerston North (+11.2%), Marlborough (+11.0%) and Wanganui (+10.1%). The lowest growth rate was shared by Otago and Auckland/Northland (+5.5%).