Retail Spending Eases in the March Quarter
Retail sales figures for the March 2000 quarter show growth is easing after the strong September and December quarters according to Statistics New Zealand. Seasonally adjusted sales were $10,639 million, an increase of 1.0 per cent compared to the previous quarter. If price effects are removed seasonally adjusted total retail sales increased in volume by 0.2 percent in the March quarter. However, if the contribution of the motor vehicle storetypes is removed total sales were effectively flat.
The easing this quarter is not unexpected given the variable monthly results says Government Statistician Len Cook. Seasonally adjusted sales were down 0.7 per cent in January, rebounded in February by 0.9 per cent and were unchanged in March 2000. The result has been influenced by factors such as higher levels of household debt, a slow down in building activity and higher mortgage interest rates adds Mr Cook. Off-setting these influences are reported high levels of consumer confidence, increasing full-time employment and higher export commodity prices.
Motor vehicle retailing contributed strongly to this quarter's result. With inflationary effects removed their contribution was still strong suggesting real volume increases. Despite the depreciating New Zealand dollar making imports more expensive, competitive pressures appear to be keeping prices down. The Retail Trade Deflators for motor vehicles measured an increase of 1.0 per cent in the March quarter. The high level of stocks held by retailers may be contributing to the competitive environment, with levels at the end of March 2000 14.5 per cent higher than March 1999. This follows on from a high level of stock in the December quarter. An expected slow down in the number of car imports has not eventuated. Numbers this month are 32.6 per cent ahead of March 1999. Higher petrol prices dominate this quarter's sales for motor vehicle services. Seasonally adjusted sales increased by 1.8 per cent compared to the December quarter but this increase was due entirely to higher prices. There is now some evidence to suggest that the higher prices for petrol have affected demand, with a small fall in volumes.