Data Flash (New Zealand)
NZ Retail Sales - December 2000 (Advance Estimate)

Key points

Statistics NZ estimate that total retail sales increased 0.7% mom in December. This outcome was very close to the median market expectation of +0.5% mom and follows two months in which sales had been broadly flat.

Total retail sales were dragged lower by weaker motor vehicle registrations (-5% mom) and petrol prices (we estimate -8% mom). Excluding motor vehicles sales and servicing, retail sales are estimated to have increased by 1.3% mom.

Commentary
We estimate that nominal sales increased by around 0.8% qoq in Q4. Our analysis of the CPI suggests that the retail trade deflator rose 1.4% qoq. Thus, we think that the volume of retail sales fell by around 0.6% qoq.

Nonetheless, this outcome would be consistent with our forecast of +0.5% qoq GDP growth in Q4 (net export volumes - especially in the agricultural sector - are expected to have been the key driver of growth). With consumer confidence having bounced back sharply in recent months, we expect consumer spending to make a strengthening contribution to growth as 2001 progresses.

Darren Gibbs, Senior Economist

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