Paymark reports spending with cards up 5.5% in November from a year ago, which was fastest growth rate this year

Here is the full release below from Paymark, which handles 75% of all electronic transactions.

Its figures come out before Reserve Bank figures on card transactions and well before official retail sales figures. They suggest a pickup in spending on small ticket items in the wake of personal income tax cuts, however Paymark later said the figures were not adjusted for the 2.2% increase in prices linked to the increase in GST to 15% from 12.5%.

Many retailers around the country are welcoming some early Christmas cheer according to the latest Paymark data. Figures released today show that the value of transactions through its network during November increased 5.5 per cent year on year – the fastest annual growth rate of any month this year.

Paymark, which processes 75 per cent of all electronic transactions in NZ, says that increases in both the volume (+ 5.6 per cent) and value (+ 5.5 per cent, or $3.78b) of transactions during the month are a good sign and that if typical spending patterns continue, we may see a stronger Christmas than the last two years.

The boost in sales comes off the back of stronger retail performance in October (+ 3.3 per cent year on year, by value) and was accentuated by one less Sunday – the slowest trading day of the week – in November this year.

Paymark CEO, Simon Tong, says that whilst the early indications are looking good, the Christmas ‘scorecard’ for 2010 will depend largely on the last-minute spending push that Kiwis are famous for. “The pre-Christmas spend up has a long lead-time, starting in mid November,” says Tong.

“It’s early days yet, and spending is mixed across industries, but these are encouraging signs that the growth in spending over Christmas may finish stronger than the last couple of years,” he adds.

The early season festive rewards have come across a wide section of the economy with fewer sectors reporting declining annual sales and sectors such as automotive repairs (+12 per cent annual growth), supermarkets (+10 per cent) and footwear (+8 per cent) growing quickly in November.

However, the buying has tended to be concentrated amongst those outlets with lower average transaction sizes. Noticeably some of the big-ticket retailers like appliance, electronic and recreational goods stores that typically see a big jump in sales ahead of Christmas are amongst those sectors still posting year-on-year declines in November or only modest annual growth.

Paymark’s figures also show that debit card use has grown in general, while credit card spending is only slightly above year-ago levels. This suggests that Kiwis are still exercising restraint when it comes to splashing out on more expensive items that might not fit under the Christmas tree.

By region, the fastest growing centres in November were Waikato, Palmerston North and South Canterbury with annual increases in value of 9.1 per cent, 7.6 per cent and 8.0 per cent respectively. Marlborough was the only region to experience a fall in trading, recording a 7 per cent drop in value this November.

Updated to include Paymark's comments that the figures were raw and unadjusted for the GST increase.