Bloomberg News

New Zealand November Card Spending Falls After Rugby Surge

December 10, 2011

(Updates with economist comment in fourth paragraph.)

Dec. 9 (Bloomberg) -- New Zealand consumer purchases on debit, credit and store cards at retail outlets fell in November as households limited spending after a surge in demand by Rugby World Cup fans the previous month.

The value of transactions on electronic cards fell 0.5 percent from October, when it rose a revised 1.6 percent, Statistics New Zealand said today in Wellington. Excluding spending at fuel outlets, car dealers and parts stores, transactions declined 1.3 percent.

Lower spending and a drop in consumer confidence add to signs that domestic demand has been subdued amid mounting concern Europe’s sovereign debt crisis would slow global growth. Central bank Governor Alan Bollard yesterday cut his forecasts for economic growth and signaled interest rates may stay at a record low until at least the middle of 2012.

“Spending is returning to more domestically driven levels after the Rugby World Cup,” Philip Borkin, economist at Goldman Sachs New Zealand Ltd. in Auckland, said in a note on Dec. 2. “Anecdote suggests that retailers had begun to discount and market more aggressively” ahead of the Christmas season, he said.

New Zealand’s dollar was little changed after the release. It bought 77.21 U.S. cents at 10:47 a.m. in Wellington. Economists expected a 0.7 percent decline, according to the median of five estimates in a Bloomberg News survey.

Consumer confidence fell to a six-month low in November, according to an ANZ National Bank-Roy Morgan index.

Growth Forecast

The economy will likely grow 2 percent in the year ending March 31, down from 2.8 percent predicted in September, the central bank said in its monetary policy statement yesterday. Private consumption will increase 1.7 percent, it said.

About 133,000 foreign visitors came to New Zealand from July to October citing the Rugby World Cup as their reason. Their spending on apparel, hospitality and travel helped purchases on cards to a seven-month high in October.

In November, hospitality sales fell 2.2 percent, today’s report showed. Apparel dropped 4.9 percent. Purchases of consumables, which make up about 35 percent of the total, declined 1 percent. Sales of durable goods such as furniture and appliances increased.

Sales at fuel outlets rose 3.9 percent while spending on non-retail items such as travel and medical fees increased 0.3 percent, the statistics agency said.

Spending on retail and non-retail items combined fell 0.2 percent, the agency said.

--Editors: Brendan Murray, Iain Wilson

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editors responsible for this story: Iain Wilson at iwilson2@bloomberg.net; Stephanie Phang at sphang@bloomberg.net


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