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


NZ Retail Sales

NZ Retail Sales

The headline value of New Zealand's retail sales rose 0.1% in September (JPMorgan -0.6%, consensus 0.4%), but the all-important ex-autos measure slipped 0.5% (consensus +0.4%), after a 0.8% rise in August. Annual growth in nominal retail sales in the year to September was just 0.5%oya, down from 1.5%oya in the year to August, and an annual gain of nearly 7% as recently as last November. In real terms over the September quarter, the volume of retail sales fell 0.9%q/q (consensus -1.2%), after a 1.4% drop in Q2. In fact, this is the third straight quarter of decline. It seems the value of retail sales has been inflated by price gains for imported products - owing to NZD weakness - as volumes plunge.

Over the month of September, sales dropped in 15 of the 25 retail sales categories. Sales of motor vehicles bounced 3.5%m/m, mainly on the back of rising prices for imported cars owing to the plunge in the NZD, while sales of fresh produce rose 4.2%. There also was a large rise in sales of liquor (up 3.0%) and in spending in bars and clubs (up 3.2%). On the flipside, however, sales of footwear plunged 5.9%, department store sales fell 3.9%, and clothing sales dived 4.7%. Each of these outcomes betrays weakness in the more discretionary areas of retail spending.

The softness in retail spending is further evidence that New Zealand's economy is in the midst of what is likely to be a prolonged recession. The economy already has contracted for two straight quarters - we expect another three quarters of falling GDP, and the implementation of additional fiscal and monetary support in coming months. Our concern is that retail sales were this weak well before the onset of the worst of the latest bout of global financial market instability and asset price corrections. Retail sales almost certainly will deteriorate significantly in the final months of 2008. Falling house prices and job losses as firms act to cut costs make the outlook for household spending in the first half of 2009 particularly bleak.

The RBNZ already has cut official interest rates aggressively, and we expect substantial monetary easing in coming quarters too. We forecast a 100bp rate cut in early December and a terminal cash rate of 3.25% later in 2009, exactly half the prevailing rate of 6.5%. Elevated market interest rates, however, and falling asset prices remain significant drags on household spending. The personal income tax cuts promised by the newly-elected National Government may provide something of a floor for household spending, but these will be undermined to a large extent by low confidence, mainly because of increased anxiety about job security.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>


Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>


Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>


MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>


NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>


Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>