NZ: Stronger retail sales volumes - ANZ

Analysts at ANZ note that New Zealand’s retail sales volumes rose 1.7% q/q in Q4, after a flat print in Q3, which saw annual growth accelerate to 3.5% from 2.7%.

Key Quotes

“Core retail volumes, which exclude volatile components like petrol, were up 2.0% q/q – to be up 5.0% over the past year. This points to a solid spending pulse, supported by solid disposable income growth, and potentially a lagged effect of the Families Package. With petrol prices on the decline, fuel volumes rose 1.0% q/q in the quarter. In nominal terms, total spending was up 1.8%.”

“Housing-related spending was on the weaker side, with furniture, floorcoverings and houseware down 1.3% q/q (the third quarter of decline), hardware down 2.1%, and department store spending down 2.6%. Clothing (4.1%), electronics (4.6%), and pharmaceuticals (8.2%) all got a boost, while there was more wining and dining – with spending on food and beverage services up 4.2%. Accommodation spending continues a solid run (1.9% q/q).”

“Today’s print was stronger than expected, but nonetheless we see some downside risk to our preliminary forecast for Q4 GDP growth of 0.6% q/q.”