NZ retail sales grow 2.1 percent in fourth-quarter, sending kiwi to new 5-year high

Friday 15th February 2013

New Zealand retail sales recorded the fastest growth in six years in the fourth quarter, adding to signs of a rebound in consumer spending and sentiment, and sending the New Zealand dollar to its highest level in five years.

The total volume of retail sales rose 2.1 percent, seasonally adjusted, in the final three months of 2012 and rose 2.9 percent from the same period a year earlier, according to Statistics New Zealand. Quarterly sales beat economist estimates of 1.4 percent growth.

The New Zealand dollar jumped as high as 85.15 US cents after the report, from 84.65 cents immediately before it was released. Two-year swaps jumped 6 basis points to 3.05 percent.

The data follows a survey yesterday showing consumer confidence rose to a 32-month high this month in the face of low interest rates and rising house prices. Retail sales have continued to grow this year, with electronic card transactions rising for a fourth straight month in January.

"There's pretty consistent evidence that activity picked up in late 2012 in a number of areas," said Michael Gordon, economist at Westpac Banking Corp. "People are taking a bit more notice of the relative growth story for New Zealand. We stack up well to the likes of the US and Europe and even with Australia there's a bit of a gap opening up."

Twelve of the 15 retail industries measured recorded gains in the fourth quarter, led by a 7.7 percent increase in fuel retailing. Hardware, building and garden supplies rose 4.3 percent, which the government statistician said reflected stronger-than usual demand in Christchurch.

Motor vehicle and parts were up 2 percent and department store sales climbed 4.5 percent.

Excluding vehicle-related industries, the volume of core retail sales rose 1.5 percent.

BusinessDesk.co.nz

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