New Zealand Card Spending Fell for a Third Month

By Tracy Withers

Feb. 11 (Bloomberg) -- New Zealand consumer spending on debit, credit and store cards fell for a third straight month in January, adding to signs that job losses and falling consumer confidence may prolong the nation’s recession.

The value of transactions on electronic cards at retailers declined 0.6 percent from December, led by lower fuel prices, Statistics New Zealand said in a statement released today in Wellington. Spending was the lowest since October 2007, seasonally adjusted.

New Zealand’s economy slumped into a recession in the first quarter of last year and may not start growing until the second half of 2009 amid falling exports and rising unemployment, according to the central bank. Retailers such as Hallenstein Glasson Holdings Ltd. and Kirkcaldie & Stains Ltd. are reporting plunging profits as consumers curb their spending.

“Core spending has flat-lined in recent months, volumes are contracting and the outlook for retailing is yet to show any evidence of life,” said Shamubeel Eaqub, economist at Goldman Sachs JBWere Ltd. in Auckland. “The key risk for retail spending is likely to be the labor market.”

New Zealand’s jobless rate rose to a five-year high of 4.6 percent in the fourth quarter, according to a government report last month. Consumers were more pessimistic about the outlook for the economy, according to a survey by Roy Morgan Research in the two weeks ended Feb. 1.

Spending at fuel outlets led the declines, while sales of home appliances, electrical goods and other so-called durable items also fell, the statistics agency said.

Transactions excluding fuel, workshop and vehicle sales dropped 0.2 percent from December when they rose 0.2 percent, the agency said.

Hallenstein this month said profit in the six months ended Feb. 1 fell about 40 percent amid slowing sales and narrower profit margins at its clothing stores.

Kirkcaldie & Stains, which owns an upscale department store in the nation’s capital city Wellington, yesterday said profit in the six months to late February will probably plunge 50 percent as sales are about 6 percent less than a year earlier.

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