NZ retail sales rocket

By Phil Boeyen, ShareChat Business News Editor

Friday 18th January 2002

Consumers had their wallets out in force last November with retail sales surging ahead 1.7%, the highest monthly increase for more than two years.

Statistics New Zealand says the core retailing group, which excludes the motor vehicle services and retailing stores such as service stations, also increased by 1.7%.

"This month's growth was widespread, with 13 out of the 15 storetypes recording an increase in seasonally adjusted sales. The sales trend has increased 21.8% from its last turning point in May 1998."

Figures show the largest contributors to the increase in seasonally adjusted sales in November, compared with October 2001, were the motor vehicle retailing stores, up $29 million, and food retailing, up $14 million.

HSBC says the sales figures have quashed any doubts about the likely resilience of the New Zealand economy, with the rate of growth more than triple market expectations of 0.5%.

"Even if some of November's surge is clawed back next month, this still sets up nominal retail sales for a solid 1.25% seasonally adjusted rise in the December quarter - suggesting consumer spending will make a solid contribution to Q4 GDP growth.

"The real risk to consumer spending lies in the months ahead, with growing signs of a softening labour market. But low interest rates, housing sector strength and growing signs of a US recovery should underpin a reasonable pace of retail spending in coming months."

HSBC says today's figures further reduce the chance of a Reserve Bank interest rate cut next week.

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