Flat card spending and rising fuel costs signal strain for borrowers
New Westpac card data point to a consumer sector under real pressure, with rising fuel costs and broader cost-of-living strains forcing households to rein in non‑essential spending.
Westpac’s March Retail Spending Pulse shows that, after seasonal adjustment, “per-person spending on Westpac issued debit and credit cards was essentially flat in March.” With prices still rising across key categories, that means households are paying more but getting less for each dollar. The bank notes that spending levels remain above a year ago, but momentum is clearly fading.
The findings come after a recent BNZ survey found that almost half of households felt more financial pressure than usual at the start of the year as school fees, uniforms, and childcare bills landed at once, leaving less buffer for higher mortgage rates.
Fuel squeeze hits discretionary spending
The report highlights a sharp shift in how Kiwis are allocating their money. Fuel spending jumped 15% over the month, and has continued to rise into early April, as the Middle East conflict pushed global energy prices higher. Westpac estimates that “we’re spending more on fuel, the actual amount we’re getting in the tank each time we top up is down around 6% to 8%.”
BNZ’s markets team has flagged a similar pattern, with crude oil and refined fuel prices surging and ASB economists estimating the current oil shock will add about $55 a week to average household costs through 2026, much of it fuel‑related.
Those higher pump prices are crowding out other outlays. Westpac warns that “those higher fuel costs are squeezing households’ disposable incomes,” with many people driving less and cutting back in areas such as takeaway food and restaurants.
The bank recorded a significant fall in hospitality spending and cautions that “it could be a tough few months for the hospitality sector” as households prioritise essentials.
Regional divergence, but common pressure
While overall spending is under strain, growth is holding up better in regions with strong rural backbones such as Southland, Northland, and Canterbury, helped by firmer commodity prices.
Auckland and Wellington have seen annual increases in card turnover as well, but Westpac notes that discretionary purchases in the capital remain subdued.
Elsewhere, including Gisborne, Bay of Plenty and Waikato, businesses report customers delaying big-ticket buys and “repairing or making do with what they have.”
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