New Zealand retail and services sectors show signs of growth

New Zealand's retail and services sectors showed signs of expansion in July 2026, despite underlying economic caution. Seasonally adjusted electronic card transaction data from Stats NZ indicated that apparel spending grew by 1.1 per cent year-on-year, reversing a 4.9 per cent decline seen in June. In actual terms, fashion spending rose by 2.5 per cent, marking the largest year-on-year increase in at least two years.

Core retail spending, which includes consumables, durables, and hospitality, grew by 3.5 per cent in actual terms. Retail NZ noted that falling fuel prices may have allowed households more disposable income for discretionary spending, particularly in the hospitality and durable goods sectors.

Simultaneously, the BusinessNZ Performance of Services Index (PSI) reached 50.6 in July, marking the second consecutive month of expansion above the 50.0 breakeven mark. While new orders and activity levels showed strength, the recovery remains fragile. The employment sub-index sat at 48.5, indicating that firms remain cautious regarding new hires due to cost-of-living pressures, interest rates, and economic uncertainty.