Consumer spending appetite returns to the dumps in June, after May figures boosted hopes
Wednesday, 15 July 2026
The Kiwi consumer appetite for spending remained in the dumps in June, according to Stats NZ data out this afternoon, with wallets remaining firmly in pockets after a brief bump over the King’s Birthday weekend.
The data parsed by ASB economists showed electronic card spending fell 1.2% in June, down $116 million, with spending on both retail and core retail (which removes fuel and vehicle purchases) decreasing notably over the month. They fell by 1.4% and 1.5% respectively.
This in turn dragged down annual growth, with year-on-year card spending ticking up just 1.3% at the June measure, compared with 3.3% by the end of the month prior.
The data was bracing after May figures, while themselves downwardly revised, had shown a 1.7% ($121 million) month-on-month uptick following a downwardly revised fall in April.
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But in June, durables and discretionary spending categories were notable decliners. Spending on durables ‒ appliances, furnishings and tech ‒ slumped by 3.9%, compared with a solid gain of 3.2% in May.
Discretionary categories ‒ hospitality, tourism, entertainment and apparel ‒ were all down; notably apparel was down 2.2% and hospitality was down 1.9% after growth in May. But even then, hospitality had seen its May figure revised down, to growth of 1.4% month-on-month from the originally calculated 2.5%.
Some of the discretionary spending slump could be attributed to the impact of a slowdown in net migration and tourism arrivals over May, partly due to the season as well as an overall slip in tourism numbers that were nevertheless improving overall.
The ASB team said it believed “the weaker NZD will provide some boost to the travel-related spending of those who still make the trip here”. But it has also said with the Reserve Bank’s hiking cycle underway, the NZ dollar could push higher for the rest of the year.
In more positive news, for the time being at least, fuel prices had eased from their heights in May, with 91 octane petrol down 3.3% in June, which also meant a decline in fuel spending, down 1.7% month-on-month.
Given oil prices are on their way up again after the war reignited in the Strait of Hormuz earlier this week, there are questions about whether July will see a further improvement in this measure.
And even while fuel prices dipped in June, they remained about 23% above pre-conflict levels.
“The broader impact of higher prices is yet to be fully reflected in the data; they continue to exert some cost-of-living pressure on households. And given the sensitivity of consumer spending to fuel price movements, the ongoing conflict in the Middle East will remain closely watched,” the ASB economists said.
“These developments, coupled with higher interest rates following the RBNZ’s OCR hike at its July meeting and the likelihood of subsequent OCR hikes until the year-end, are expected to further weigh on consumer spending over the coming months.
“With the absence of support from lower mortgage rates, and persistent headwinds from the still-subdued housing market, and weak labour market, consumer spending is expected to be moderate in the short term.”