Christmas spending is building steadily

According to Paymark, the earthquake of Monday 14 November caused a drop in spending on the day in most New Zealand regions. Underlying spending through the Paymark network was 3.0% or $4.2 million below the level of the previous Monday. A similar estimate of the national effect is derived from the modest 0.7% annual underlying growth rate recorded across the country on the day, this growth rate being 2.8% below the 3.5% average growth rate over the previous week.

The annual growth rate was slightly higher the next day, Tuesday (1.4%), and had resumed a more normal pattern from Wednesday.

Compared to the same days in 2015, any spending decline over the Monday and Tuesday was highest in the combined Marlborough/Kaikoura region (-14.0%) and in the Wellington region (-12.1%), with the dollar effect being higher in Wellington.

By Wednesday, growth had resumed in Wellington, although not within the Accommodation sector until the following Tuesday (22^nd). Spending was still below year-ago levels in Marlborough/Kaikoura by the end of month.Figure 1: Underlying spending through Paymark after Monday 14^th earthquake

Otherwise the interest in retail markets was the start of the busy pre-Christmas period. Spending did jump noticeably, as per usual, on Thursday-Saturday 17-20^th November and again one week later. Underlying spending was highest for the month on Friday 25 November but the growth rate on the day was in keeping with other days that week, indicating a steady rise in Christmas spending in New Zealand rather than the frenzied Thanksgiving long weekend in the US.

Over the last full week of November, the underlying annual spending growth was solid if unspectacular at 5.1%. Accommodation and liquor retail merchants recorded the fastest annual growth during the week.

Combined, the earthquake and start to Christmas spending added up to underlying growth between October and November of 0.2% when seasonally adjusted. The annual underlying growth rate for the month remains high at 6.9%.

Figure 2: Underlying spending through Paymark by month