Petrol prices have increased for many Aucklanders this week as the regional petrol tax came into effect. Pump prices had already been rising before 1 July, due to rising international oil prices, and appear to be having an effect on wider spending patterns, according to Paymark figures.
Paymark transacted 104.9 million payments in June 2018 which amounted to $4.8 billion spending on goods and services across the country. When large merchant entries to or exits from the network are excluded, the underlying growth was a moderate 4.4% since June last year. Further excluding fuel merchants, the annual growth rate was even slower at 4.1%.
In seasonally adjusted terms, underlying total spending increased 0.7% between May and June this year. This figure has proven volatile in recent months but has averaged 0.2% over both the last three months and six months.
For the second month in a row, Auckland/Northland experienced the slowest annual underlying growth. Likewise other major urban regions of Wellington and Canterbury continue to record below-average spending growth rates. Fastest growing between June and June were the smaller regions of Wanganui, Marlborough, Palmerston North and Gisborne.
Spending amongst Paymark Fuel merchants accounted for $419 million of total spending in June. The higher petrol prices of late show as a higher average spend per transaction amongst these merchants. The higher petrol prices now appear to acting as a dampening influence on spending amongst other merchants, judging by the low ex-fuel annual growth rate recorded in June. And that’s before the price hikes of this week.
Another recent price trend of note, in the opposite direction, is a lower average spend per transaction amongst Accommodation merchants, possibly reflecting higher capacity combined with slower demand growth amongst domestic guests this autumn/winter. The number of Paymark Accommodation merchants has increased 3.7% since June 2017 while the number of transactions is now growing below this rate and below the transaction growth rate of a year ago (1.1% in June and 9.2% in June 2017). The Accommodation Survey of Statistics New Zealand, available up to April, also points to growing capacity and slower growth of domestic guest nights, the latter counter to the pattern, at least up to the latest Statistics NZ figures to May, of growing international arrivals to New Zealand.
More generally, the spending pattern is of moderating growth. Looking at annual underlying growth rates over recent quarters, spending was up 3.8% in the latest June quarter but this represents a marked decline from the 6.1% rate four quarters earlier, and from the 6.9% rate in June quarter 2016.