Monday 21st July 2008
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Retail electronic card transactions fell 0.4% in June from May, seasonally adjusted, Statistics New Zealand said in a statement. Excluding motor vehicles and fuel, core retail transactions fell 1.2%
"The signs of retail recession are accumulating," said Shamubeel Eaqub, director of Australia & New Zealand research at Goldman Sachs JBWere (NZ). A central bank interest rate cut this week is "a line ball call" though a cut in September "is absolutely necessary."
Retailers including Warehouse Group Ltd. and Briscoe Group have cut their profit forecasts citing a drop in consumer demand amid higher prices for fuel, food and credit. A net 27% of people in a One News Colmar Brunton Poll this month expect the economy to worsen in the next 12 months, a deterioration from the 25% figure in June.
There were 80 million electronic card transactions with New Zealand merchants worth NZ$4.3 billion in June, up from 77 million, or NZ$4.2 billion in the same month last year, Statistics New Zealand said.
In the year to June 30 there were 1 billion transactions worth NZ$55.2 billion, compared with 923 million worth NZ$51.2 billion a year earlier.
The central bank will keep the official cash rate unchanged at 8.25% at its review this Thursday, according to nine of 12 economists in a Good Returns.co.nz survey last week. Three predict a 25 basis points cut. Of those picking no change this week, six economists say the bank will move on September 11.
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