Spending, job ads buck confidence trend

Photo: Getty Images
Photo: Getty Images
Consumer and business confidence may be at new low levels but some businesses may be in for a pleasant surprise during the next few months.

Housing-related merchants are the most likely beneficiaries of extra spending, according to the latest Paymark figures.

Paymark figures released yesterday show consumers increased their spending in August.

Underlying spending through Paymark increased 1.4% in total and 1.1% once transactions at fuel outlets were excluded.

Fuel prices had risen sharply in the last couple of months, pushing the value of fuel transactions. However, higher fuel prices and the talk of lower business confidence had not deterred consumers from spending elsewhere, a Paymark spokesman said.

Spending through Paymark totalled $5.1billion in August. In underlying terms, the value of those transactions was 6.5% higher than in August last year and a marked improvement on the 4.6% per year averaged in the first seven months of the year.

The ANZ Job Ads index could also point to improved spending confidence among some New Zealanders.

Job advertisements rose 0.6% in August, up 5% on a year ago.

ANZ senior economist Liz Kendall said the data pointed to a stable labour market and unemployment levels remaining low.

In recent months, there had been moderate gains in job advertisements but, as a trend, job advertisements had cooled, consistent with softer employment intentions in the ANZ Business Outlook survey.

Our expectation is the unemployment rate will remain broadly stable at about 4.5%, consistent with continuing tightness in the labour market.''

If weak business expectations and intentions started to become a self-fulfilling prophecy, there was a risk of a softening in job advertisement growth from now on.

If that weakened, the strength in the labour market could start to ebb, Ms Kendall said.

Details included in the Job Ads index revealed hiring for agriculture, forestry and fishing was up 7.6% in August from July. The largest fall in the month was for IT advertisements which fell 5.2%.

Growth in retail job advertisements remained weak. Retailers were dealing with long-term challenges which was encouraging investment in labour-saving technologies.

The outlook was starting to look more challenging on the back of rising labour costs, a softer outlook for household spending and moderating population growth, she said.

Construction hiring continued to decline, the figures showed.

Construction jobs were down 4.9% in the year, consistent with a pull-back in hiring intentions.

Despite apparent skills shortages in the industry, this is consistent with more subdued expectations for the pipeline of work,'' Ms Kendall said.

Paymark figures showed Otago spending had slipped since July.

Otago shoppers spent $303.5million through Paymark in the month, up 5.5% annually. There were 6.42million transactions, up 6.2%.

Otago and Auckland/Northland shared the lowest growth rate of 5.5%.

Southland shoppers spent $113.7million, up 7.2%, on 2.35million transactions, up 8.8%.


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