NZ retail sales growth stalls on weaker auto-related industries; restaurants gain

Monday 14th December 2009

New Zealand retail sales growth stalled in October on weaker vehicle-related retailing, offsetting stronger growth in cafes, restaurants and accommodation.

Total sales were unchanged in October after two months of gains, according to Statistics New Zealand. The office released the bare-bones numbers last week after publishing data for electronic card transactions.

The data comes after Reserve Bank Governor Alan Bollard last week flagged the likelihood of interest rates rising in the middle of 2010 – sooner than he has previously indicated – after bumping up his track for economic growth. Government data on spending on credit and debit cards at retailers for November, released last week, showed the strongest level for all of 2009.

“The RBNZ fears that rising house prices and improved confidence could reinvigorate a debt-fuelled increase in spending which would further exacerbate New Zealand’s external indebtedness,” said Jane Turner, economist at ASB. “The subdued trend in retail spending and credit growth suggests that consumers remain cautious.”

Businesswire.co.nz

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