Tills ringing as confident consumers empty wallets

Cheap petrol, lower mortgage rates and strong consumer confidence are encouraging a splurge on eating out and furniture and appliances.

Shoppers got out their cards last month, with national spending up 1 per cent on January, led by ringing tills at hotels and restaurants.

Hospitality sector sales rose $21 million in February alone and are up a massive 12 per cent on a year ago, benefiting from high consumer confidence to go out and spend. The hotels to cafes sector is also getting a boost from the current migration boom and record high tourist numbers.

Sales were also up for furniture and appliances in February, up $14m in the month, Statistics NZ figures on Tuesday showed.

The recent rebound in petrol prices has not dented shoppers’ confidence, with core retail sales up a stronger than expected 1.2 per cent in February.

That followed a 1 per cent rise in core sales in January, excluding cars and fuel sales

Petrol prices slumped about 50 cents a litre between October and early this year, before rising again to about $1.95c a litre now.

The extra cash on hand from cheaper petrol has helped lift core retail spending 6.8 per cent in the past year, the fastest pace of growth since late 2011, said Deutsche Bank.

High jobs growth in the past year and real wage growth because of some falls in consumer prices had helped boost discretionary spending in the past year, Infometrics said.

‘‘With economic growth hitting 3 per cent and employment levels running high, we expect discretionary spending to remain elevated over the year ahead,’’ Infometrics said.

However, spending on furniture and appliances may be dampened by a falling New Zealand dollar, making imports more expensive.

Westpac Bank economists said the figures for electronic card spending were

Retail sales stronger than expected 1.2pc in February

stronger than expected in February.

The underlying pace of spending growth has picked up, because of cheap petrol, low mortgage interest rates and higher house prices, which would boost consumer confidence and spending this year, Westpac senior economist Michael Gordon said.

ASB economists said the latest card spending figures showed household spending was picking up this year and more new jobs and record migration would support spending growth.

The main exception was in rural areas, with the low milk payout likely to cramp incomes and spending.

There was a lift for durables sales, up 1.3 per cent or $14m, last month.