Retail sales grow 2.1% in 4Q, sending TWI to post-float high

New Zealand retail sales recorded the fastest growth in six years in the fourth quarter, adding to signs of a rebound in consumer spending and sentiment, and sending the trade-weighted index to a post-float high.

The total volume of retail sales rose 2.1 percent, seasonally adjusted, in the final three months of 2012 and rose 2.9 percent from the same period a year earlier, according to Statistics New Zealand. Quarterly sales beat economist estimates of 1.4 percent growth.

The total volume of retail sales rose 2.1 percent, seasonally adjusted, in the final three months of 2012 and rose 2.9 percent from the same period a year earlier, according to Statistics New Zealand. Quarterly sales beat economist estimates of 1.4 percent growth.

The data follows a survey yesterday showing consumer confidence rose to a 32-month high this month in the face of low interest rates and rising house prices. Retail sales have continued to grow this year, with electronic card transactions rising for a fourth straight month in January.

"There's pretty consistent evidence that activity picked up in late 2012 in a number of areas," says Michael Gordon, economist at Westpac Banking Corp.

"People are taking a bit more notice of the relative growth story for New Zealand. We stack up well to the likes of the US and Europe, and even with Australia there's a bit of a gap opening up."

Twelve of the 15 retail industries measured recorded gains in the fourth quarter, led by a 7.7 percent increase in fuel retailing. Hardware, building and garden supplies rose 4.3 percent, which the government statistician says reflects stronger-than usual demand in Christchurch.

Motor vehicle and parts were up 2 percent and department store sales climbed 4.5 percent.

Excluding vehicle-related industries, the volume of core retail sales rose 1.5 percent.

(BusinessDesk)

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2 Comments & Questions

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Another huge red flag for Wheeler. Why are interest rates still stuck at emergency lows?

The rise in the NZ$ is pre-empting the increases in interest rates that have to come soon. Wake up Wheeler!!!!

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He is stuck between a rock and a hard place, increasing the interest rate will only fuel the exchange rate pushing it even higher.

The only thing NZ can do is to introduce extra funding (print money) into the economy to devalue the dollar this in itself will push inflation higher in the short term but would balance out with in a year.

No easy outs here we are such a small economy, we are at the mercy of the big guns

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