Positive economic note to end year

The year ended on a positive economic note albeit with signs of cooling in the major centres.

Spending through Paymark totalled $5,942 million in December. The underlying annual spending growth rate of 4.9% was below the year-to-date average but that was in part due to December this year having five Sundays.

In seasonally adjusted terms, underlying spending was up 0.5% on November, contributing to a strong December quarter growth rate of 2.1%.

December was marked by strong growth early in the month, including 8.1% annual underlying growth through Paymark in the first seven days, continuing on from the spending surge of late November. More moderate growth rates were recorded during the rest of the month, including 6.4% annual growth on Boxing Day. Peak spending for the month was again on the Friday before Christmas Day, up 2.7% on the 2016 peak.

Again noticeable during December was the continued slowdown in spending growth in the major centres, with annual underlying growth 3.3% in Auckland/Northland, 3.9% in Wellington and 4.1% in Canterbury. Highest growth was in Marlborough (18.6%), which includes Kaikoura in the Paymark statistics, and amongst other smaller regions such as West Coast (10.5%), Wairarapa (10.3%) and Gisborne (10.2%).

Spending over all months of 2017 through the Paymark network totalled a record $60.0 billion. Underlying spending growth was again strong at 5.4%, although slightly below the 5.8% averaged over the previous five years.

Spending with debit cards rounded out to nil annual growth rate while credit and contactless card spending increased 11.5%. The switch from debit cards to contactless cards creates an unfortunate extra cost for merchants at the point of sale but debit cards were still used for the majority (51.5% by value) of spending through Paymark (down from 54.2% in 2016).

The total number of transactions for the year was 1,266 million. Underlying transaction growth rates were 6.4% in total, 23.3% for credit and contactless cards and -1.3% for debit cards. The average transaction sizes were $47.39 in total, $64.59 for credit and contactless cards and $37.89 for debit cards.

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