Turning the corner? Spending is up, and the minimum wage is set to rise
Friday, 12 December 2025
Electronic spending lifted in November, signalling growing appetite for spending among consumers, an economist says.
Spending in core retail industries increased 1.1% or by $67 million in November, according to the latest Stats NZ’s electronic card transactions data.
The seasonally adjusted figures show spending on apparel was up the most across all categories in November, up 3.4% or by $11m.
Spending on motor vehicles increased by 2.6% or $5.1m and spending on durables increased by 2.1% or $35m.
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Hospitality spending also increased in the month - up 1.3% or by $18m.
In actual spending terms, November spending increased 1.6% year-on-year.
Westpac senior economist Satish Ranchhod said the 1.1% increase to core spending figures, seasonally adjusted, was a “solid gain”.
“Importantly that increase was in discretionary spending categories, like durable goods for the home and hospitality. That points to firming spending appetites in the economy,” Ranchhod said.
The 1.2% increase was stronger than the 0.6% increase it forecast, and came after an unrevised 0.2% increase in the previous month.
The level of spending was now 1.6% higher than this time last year.
“Gains were seen across all store types in November, but with the strongest growth seen in durables and apparel – categories that have likely benefited from the increasing prevalence of Black Friday sales,” Westpac said in an economist note.
“Encouragingly, spending on hospitality rose 1.3%, rebounding from a similarly sized decline in October.”
In recent years retail spending has been volatile around the year end, likely reflecting sensitivity to the Black Friday, Christmas and New Year sales.
Retail NZ chief executive Carolyn Young said the lift in spending in November was “positive news” and showed “signs of green shoots across the sector” as retailers headed into their busiest time of the year.
“November is the launch pad for the busy Christmas sales so this increase sets up retail for a positive end to a really difficult trading year,” Young said.
“The Reserve Bank indicated at their November meeting that they felt we were at the end of the easing cycle and were expecting to see growth in 2026 - and went as far as to tell consumers that they needed to get out and spend to support economic growth, so it seems that the potential relief ahead signalled by the Reserve Bank, may be here.”
Young said the retail sector had been under significant strain, with businesses advising that they had been absorbing as many cost increases as they could, “working harder than ever as margins are being squeezed”.
She said that had created significant challenges to remain open. “Hopefully these sales numbers are sign that we are turning the corner as retailers will be looking to 2026 as a year of recovery.”
Minimum wage increase
The minimum wage will increase by 2% to $23.95 an hour from April 1.
Workplace relations and safety Minister Brooke van Velden announced the change today, saying the new rate would benefit around 122,500 New Zealanders.
“[This new rate] strikes a balance between keeping up with the cost of living and not adding further pressure on the costs of running businesses,” van Velden said.
“I know those pressures have made it a tough time to do business, which is why we have taken this balanced approach.”
Van Velden said the increase aimed to help minimum wage workers keep up with the cost of living. She said inflation was projected to remain relatively stable at around 2% from June 2026.
The starting-out and training minimum wage rates will be set at $19.16, to remain at 80% of the adult minimum wage.