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

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news