Retail sales rise more than expected

Friday 12th June 2009

New Zealand retail sales rose more than expected in April, reflecting a surge in motor vehicle retailing and increased sales at department stores. Excluding autos, sales unexpectedly fell.

Total retail sales rose 0.5% in April, seasonally adjusted, after sinking a revised 0.2% in the previous month, according to Statistics New Zealand. Sales were more than twice the 0.2% gain forecast by economists in a Reuters survey. Excluding autos, core retail sales declined 0.1% against expectations of a 0.4% gain.

The data comes after Reserve Bank Governor Alan Bollard yesterday said there are “signs of a rebound” in household spending, helped by a pick-up in net immigration, lower taxes and lower interest rates.

The trend for rising sales may continue, with figures earlier this week showing electronic card spending at New Zealand retailers rose 0.9% in May, or 1.6% excluding autos. Still, any revival is likely to be muted with the jobless rate forecast to rise through this year as the recession endures.

The data suggests “a slow grinding recovery in the retail sector,” said Bernard Doyle, New Zealand strategist at Goldman Sachs JBWere. “It is difficult to see explosive recovery anytime soon, with unemployment likely to rise through most of 2009.”

Retail sales rose in 14 of the 24 store categories in today’s survey, with motor vehicle retailing climbing 3.5%. Department store sales gained 4 percent.

Food prices fell 0.6% in April.

Businesswire.co.nz

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