Auckland, Monday 6 March 2017
February spending through Paymark was above year-ago levels in spite of having the extra day in February 2016. The annual underlying growth rate was 2.2%. The annual underlying growth rate for the 1st-28th February only was 6.7%, slightly below the 6.8% average of the previous 12 months.
The hospitality sector remains a strong contributor to total growth, with Accommodation spending up 10.9% and Food and beverage services up 8.4% between 1-28 February 2016 and 2017, both below the growth rates averaged over 2016 (18.5% and 14.4% respectively).
Fastest growth was recorded by Fuel Retailers (+19.3%), while Clothing and footwear store growth was zero between the two 28-day periods.
In seasonally adjusted terms, underlying spending declined by 0.8% from January 2017. This follows a large 1.7% rise between January and February. Combined, the average per month growth in the first two months of the year shows the growth momentum of recent years has been maintained although the rate has slowed slightly.
Looking at year-on-year growth rates for all days in February, growth was highest in Hawke’s Bay (+8.4%), Palmerston North (+6.5%) and Bay of Plenty (+6.3%). Declines were recorded in Marlborough (-3.3%), the Paymark-defined area that includes Kaikoura, and in Canterbury (-0.3%).
A key contributor to recent New Zealand economic growth has been international tourism. Paymark figures show this trend has continued over the busy four months of November to February, although not all merchants are recording higher foreign card payments and international tourist spending is only a small part of business for many merchants.
Foreign-issued credit cards were used for payments of $1,070 million payments through the Paymark network between November 2016 and February 2017. This represented 5.2% of all payments during this period. The fact that the annual underlying growth of foreign-issued cards was higher (6.5%) than payments with all cards (5.5%) points to absolute and relative growth of international tourist spending in recent months.
|Sector||Level of spending ($m)||Annual underlying growth (%)|
|Foreign card spending||Total card spending||Foreign card share of level||Foreign card spending||Total card spending||Foreign card share of growth|
|Selected retail shops||71||549||13%||-9%||0.6%||N/A|
|Activities and events||163||736||22.1%||-5.1%||0.9%||N/A|
|Food and beverage services||167||2,621||6.4%||22.6%||10.5%||12.4%|
|Food and liquor retailing||109||5,665||1.9%||14.3%||5.6%||4.5%|
|Underlying total spending||1,070||20,561||5.2%||6.7%||5.5%||6.5%|
Not surprisingly foreign-issued card spending growth was strong amongst Accommodation merchants, contributing around one-third of spending and spending growth. Likewise international tourism made a strong contribution to transport merchants such as rental vehicle companies, taxis and airport service providers, and to education merchants.
Food and liquor merchants are not as heavily dependent on international tourism spending but the recent growth amongst service providers such as cafes and bars, and to a lesser extent amongst retailers such as supermarkets, is partly attributable to more spending by people using foreign-issued credit cards.
However there are merchants who typically cater to international tourists that are experiencing low spending growth in total at present. A merchant grouping of those selling retail goods, such as gift shops and duty free outlets, has seen increased total spending through Paymark of only 0.6% in 12 months. Likewise, a grouping of merchants providing services to the tourism sector, such as tourist activity operators and museums, shows annual spending growth of only 0.9%.
Both groupings have experienced lower foreign-issued card payments over the summer months. It is not known whether this decline reflects an underlying spending trend or a change in payment mechanism for these goods and services by international tourists.
The remaining merchants, representing around half of total spending, have experienced low payment growth (+0.8%) by foreign-issued cards and, due to the large relative influence of the domestic sector on these merchants, this international spending growth made only a very small contribution to annual spending growth amongst these merchants.
* Large clients moving to or from Paymark within last 12 months excluded from change calculation
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