NZ 3Q retail sales rise less than expected as cars, auto parts offset soft consumer spending

New Zealand retail sales grew less than economists were picking in the September quarter as growth in sales of cars and auto parts was offset by weak consumer spending in the core sectors.

The total volume of retail sales rose 0.3 percent in the three months ended Sept. 30, from a 1.5 percent pace in the June period, which was revised down from 1.7 percent, according to Statistics New Zealand. That missed the 0.9 percent volume growth forecast in a Reuters survey of economists. The seasonally adjusted value of retail sales, which doesn’t adjust for price changes, rose 0.6 percent to $18.18 billion.

The volume of motor vehicles and parts rose 3.3 percent, underpinning gains, with sales in core retail industries falling 0.1 percent in the quarter. Clothing, footwear and accessories sales dropped 6.8 percent, and accommodation declined 4.4 percent.

“We are seeing mixed results this quarter, with the continued lift from the motor-vehicle industries keeping sales positive, despite eight of the 15 industries falling in September,” industry and labour statistics manager Blair Cardno said in a statement.

The kiwi dollar initially dipped after the figures were released, to 82.59 US cents from 82.75 cents, before rebounding to 82.81 cents. The currency had surged earlier, following performance of manufacturing data which climbed to 55.7 in October from 54.3 the previous month.

The retail report showed the volume of sales of furniture, floor coverings, housewares, and textiles rose 4.7 percent, and hardware, building and garden supplies climbed 3 percent, with increased construction activity in Auckland and Christchurch supporting that spending.

The value of sales on furniture, floor coverings, housewares, and textiles rose 3.2 percent to $511 million and hardware, building and garden supplies climbed 2.8 percent to $1.39 billion.

The Reserve Bank is keeping tabs on whether the bubbling property markets in the country’s two biggest cities is fuelling consumer spending, and whether that will lead to faster inflation next year.

Canterbury showed the biggest growth among the regions, with retail sales growing a seasonally adjusted 2.1 percent in the period, while Auckland retails increased 0.8 percent. Waikato spending fell 0.4 percent in the quarter, and the North Island, excluding Auckland, Wellington and Waikato, declined 0.9 percent.

Volumes of supermarket and grocery sales fell 0.1 percent in the September quarter, with values rising 0.6 percent to $4.27 billion.

The value of actual retail sales rose 4.5 percent to $17.6 billion in the September quarter from the same period a year earlier, with volumes up 4.7 percent.

The value of retail stocks held at the end of the quarter rose 2.4 percent to $6.53 billion from the same period a year earlier, following a 0.5 percent increase in the June period.

The biggest build-up was a 6.7 percent lift in vehicle and auto parts to $1.44 billion, followed by a 6.2 percent increase in department stores to $778 million and a 4.1 percent rise in hardware, building and garden supplies stocks to $784 million.

(BusinessDesk)