Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Retail Spending Strong Last Year

Retail Spending Strong Last Year


Statistics NZ released December quarter data on retail spending. They showed that excluding the volatile automotives sector which we economists tend to strip out, and removing price changes, sales rose by a strong 1.5% to be 6.3% higher than a year earlier. The best performing storetype in the quarter was appliances +7%. The worst was accommodation etc –1.4%. Sales of durable goods (traditionally bought strongly when people feel confident of the future) jumped 5.7% to be 12.5% ahead of a year earlier. But December month sales were flat ex-auto suggesting strong growth is easing.

On a regional basis one must be extremely wary of making strong statements as there are high standard errors. With this in mind we note that in the December quarter top sales growth was in non-Canterbury South Island +2.6%. The worst was Canterbury –0.1%. Auckland jumped 2%.


Strong growth in retail spending the past year reflects the following.

Below average interest rates from mid-2001.

Catch-up spending by farmers in response to record incomes.

A surge in dwelling construction.

Strong population growth courtesy of net migration flows.

Strong growth in foreign student numbers.

Above average consumer confidence.

Rising wealth from house prices on average 8.5% higher in the September quarter than a year earlier.


Borrowers as the 1.5 growth suggests a firm domestic economy offsetting export weakness and leaving the Reserve Bank wary of cutting interest rates again.

Exporters as the exchange rate tends to face upward pressure when areas like retail spending are strong.

Employers as the 1.5 growth suggests firm pressure on the availability of employees for other sectors with wholesaling and retailing accounting for some 17% of total employment.

Government funded people/organisations as high retail sales means high GST receipts means high surpluses and some extra cash to distribute – or tax cuts.


We expect retail spending growth to slow down this year for the following reasons.

Slower jobs growth.

The Middle East conflict hitting confidence.

Reduced farm incomes and absence of the farm catch-up spending on durables.

Higher petrol prices.

Nonetheless sales will remain underpinned by the following factors.

Rising house prices.

High job security.

Strong house building/furnishing.

Still strong net migration inflows.

Below average interest rates all year.

Rising exchange rate assisting consumer confidence.

Ex-auto sales have grown 3.5% p.a. on average the past decade. We forecast growth potentially more than 1% below this over 2003, recovering over 2004 as world growth lifts export incomes again.

© Scoop Media

Business Headlines | Sci-Tech Headlines


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>


Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news