June card spending falls broadly as cost-of-living pressures and oil price risks resurface
New Zealand electronic card spending fell sharply in June, unwinding much of the rebound seen in May, according to Stats NZ data cited separately by ASB and Westpac.
Retail spending fell 1.4% for the month, with core retail spending (excluding fuel and vehicles) down 1.5%, against a Westpac forecast of just +0.1%. ASB put total card spending down 1.2% overall.
The declines were broad-based: ASB noted durables spending dropped 3.9% after a King's Birthday-fuelled 3.2% gain in May, while apparel and hospitality spending each fell around 2%. Groceries were the only category to rise, up 0.4%, though even there Westpac found around 30% of households it surveyed have traded down to fewer or cheaper items.
Cost-of-living pressures still biting
Despite fuel prices easing over the month — 91-octane petrol down 3.3% — both banks stressed the relief has been limited.
ASB economist Yen Nguyen (pictured left) noted prices remain "still way above the pre-conflict levels," around 23% higher.
Westpac was similarly blunt.
"Taking a step back and looking at the broader picture for the retail sector, things are still looking tough," said Satish Ranchhod (pictured right), senior economist, Westpac NZ.
Westpac's household conversations found 36% had wound back discretionary spending and 15% had delayed or cancelled travel plans.
Renewed conflict clouds the outlook
Both banks flagged the re-escalation of the US-Iran conflict last week, with Strait of Hormuz traffic falling sharply and global oil prices climbing roughly 10% since the start of this week.
Westpac warned petrol could push back above $3 a litre if that's sustained. Adding to the squeeze, the Reserve Bank has delivered a 25-basis-point OCR hike at its July meeting, with further increases expected to lift the cash rate to 3.25% by year-end.
ASB expects card spending to "remain moderate throughout 2026," citing fading support from lower mortgage rates, a weak labour market, and reduced tourism tailwinds, while Westpac similarly expects only gradual improvement through the back half of the year.
For more insights, read the ASB and Westpac commentaries.
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