UPDATED: New Zealand retail sales rose more than expected in the second quarter, as vehicle sales volumes and values increased at the fastest pace in two years.
The volume of retail sales rose a seasonally adjusted 1.2 percent in the three months through June, from an upwardly revised 0.8 percent in the first quarter, according to Statistics New Zealand. That’s more than the 1 percent expected in a Reuters poll of economists. The New Zealand dollar climbed as high as 84.88 US cents from 84.63 cents immediately before the numbers were released.
Retail sales are increasing amid upbeat consumer confidence in an expanding economy. The Reserve Bank last month said the economy is expected to grow at an annual average rate of 3.7 percent this year, from a 2.9 percent pace in 2013. New Zealand interest rates are expected to resume their upward path next year following a "period of assessment" after the central bank last month raised the rate at its fourth consecutive meeting to 3.5 percent.
"Overall spending continues to rise, supported by population growth, an improving labour market and strong consumer confidence," Nathan Penny, rural economist at ASB Bank, said in a note. "On the inflation front, prices in the retail sector remain soft, with prices continuing to fall across a broad range of goods."
ASB expects the central bank to resume hiking rates again in March next year, Penny said.
In the second quarter, 11 of the 15 retail industries had higher sales volumes. Motor vehicle and parts retailing recorded the largest volume increase, up 3.6 percent, as the sales value gained 2.9 percent and prices fell 0.7 percent, Statistics New Zealand said.
Motor Industry Association figures show sales of new passenger and commercial vehicles tallied 62,200 in the first half of this year, suggesting annual sales of 124,400, exceeding the previous annual record of 123,247 set in 1984.
Other retail industries which posted large volume gains in the quarter included accommodation, up 6 percent, electrical and electronic goods retailing up 2.9 percent and food and beverage sales up 2.7 percent, Statistics NZ said.
The industries with the largest falls in the quarter were fuel, down 3.3 percent, and clothing, footwear and accessories retailing, down 2.2 percent, the agency said.
Actual retail sales were up 3.8 percent in value from the same quarter a year earlier, ahead of the 3.4 percent estimate in the Reuters survey.
Excluding fuel and vehicle related spending, core retail sale volumes in the second quarter rose a seasonally adjusted 1.2 percent, following a 1 percent rise in the first quarter.
Sales of motor vehicles, parts and fuel aren’t currently seasonally adjusted although the statistics agency said it may provide figures on this basis from the third quarter.