(Bloomberg) — New Zealand retail spending surged in May when the nationwide lockdown was lifted but remains well below pre-covid levels.
Purchases on credit and debit cards at retail outlets rose 78.9% from April, Statistics New Zealand said Thursday in Wellington. That follows a 47.5% drop in April and a 3.2% decline in March. However, the value of spending at NZ$5.3 billion ($3.5 billion) is 9% lower than in February.
The coronavirus lockdown was lifted on May 14, breathing life into retailing outlets that — other than supermarkets and a handful of other essential stores — had been shuttered for seven weeks. As the nation grapples with rising unemployment and a lack of international tourism, the prospects for a sustained surge in consumer spending appear dim.
“There are signs of pent up demand after the lockdown,” said Satish Ranchhod, senior economist at Westpac Banking (NYSE:) Corp in Auckland. “We expect to see further gains in spending over the coming months however we don’t expect a return to pre-Covid-19 levels for some time. Job losses, increases in debt and general nervousness about the economic outlook will dampen spending appetites.”
Much of May’s spending increase was seen in hospitality, which reported adjusted sales of NZ$640 million, up from NZ$57 million in April. Still, that spend is 41% smaller than the NZ$1.1 billion seen in February.
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