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

 


UPDATE: NZ retail sales growth slows in first quarter

UPDATE: NZ retail sales growth slows in first quarter as interest rate hikes, slower housing market impact

(Recasts to show growth is sales is slowing, adds economist comment)

By Tina Morrison

May 14 (BusinessDesk) - New Zealand retail sales in the first quarter rose at half the pace of the fourth quarter as consumers held tighter to their wallets amid a slowdown in the housing market and as higher interest rates started to bite.

The volume of retail sales rose a seasonally adjusted 0.7 percent in the first three months of 2014, according to Statistics New Zealand, less than the 0.8 percent expected by economists in a Reuters survey and half the previous quarter’s 1.4 percent growth rate.

Retail sales growth is slowing after the Reserve Bank began a cycle of interest rate hikes in March and as the housing market slows in response to restrictions on bank lending to low equity borrowers. The Reserve Bank has more interest rate hikes in the pipeline after raising the benchmark in each of the past two months and expects the hikes will have a quicker impact because many borrowers are on floating rates or have fixed rates coming due soon.

“Consumer spending has lost some momentum compared to last year, perhaps in part a response to a slowing housing market,” Felix Delbruck, senior economist at Westpac Banking Corp. in New Zealand, said in a note. “Consumer spending will increasingly become a moderating force for economic growth as interest rates rise and the housing market slows. This may be happening just a bit sooner than we expected.”

Delbruck said the weaker retail data suggests “some mild downside risk” to Westpac’s first quarter gross domestic product forecast of 1.1 percent. First quarter GDP is scheduled for release on June 19.

The New Zealand dollar edged lower following the retail data, and was trading at 86.27 US cents at midday, from 86.41 cents immediately before the 10:45am release by Statistics New Zealand.

In the first quarter, actual sales were up 3.4 percent in value from the same quarter a year earlier, lagging the 3.7 percent estimate in the Reuters survey of economists.

Excluding fuel and vehicle-related spending, core retail sales in the first quarter rose a seasonally adjusted 0.8 percent from the previous quarter.

Sales in electrical and electronic goods led the quarterly increase in volumes, up 5.5 percent following a 3.7 percent gain in the fourth quarter. Hardware, building and garden supplies rose 2 percent in the first quarter while food and beverage sales increased 1.5 percent.

Meanwhile, sales in supermarket and grocery stores declined 0.7 percent and sales of furniture, floor coverings, houseware and textiles fell 2.4 percent.

Fuel retailing, which isn't seasonally adjusted, fell 0.6 percent in the latest quarter. Vehicle spending rose 0.6 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Constructions Builds: Consents Top $2 Billion For The First Time

Building consents reached a record $2 billion in March 2017, boosted by new homes and several big non-residential projects, Stats NZ said today. This was up 37 percent compared with March 2016. More>>

Other Stats:

Health: Work Underway To Address Antimicrobial Resistance

As part of a global response the Ministries of Health and Primary Industries have today jointly published ‘Antimicrobial Resistance: New Zealand’s current situation and identified areas for action’ to respond to the changing pattern of antimicrobial resistance in New Zealand. More>>

ALSO:

Employment: Vodafone Announces Family Violence Policy To Support Team

From today, any of Vodafone’s 3,000 workers affected by family violence will be eligible for a range of practical support, including up to 10 additional days of paid leave per year. More>>

Burning Up Over Saturn: Cassini's Grand Finale

With propellant running low, NASA scientists are concerned that the probe might accidentally crash into one of Saturn’s nearby moons, which could contaminate it with Earthling bacteria stuck to the spacecraft. Instead, the spacecraft will be safely "disposed" in Saturn's atmosphere. More>>

ALSO:

Our Fresh Water: Monitoring Report Confirms Serious Challenges For Rivers

• nitrogen levels are getting worse at 55 percent and getting better at 28 percent of monitored river sites across New Zealand • phosphorus levels are getting better at 42 percent and getting worse at 25 percent of monitored river sites across New Zealand More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news