No let up in retail boom

By Phil Boeyen, ShareChat Business News Editor

Monday 11th March 2002

The domestic economy continues to strengthen with retail sales in January rising 0.5% on the previous month and annual growth now at 8.9%

Sales for the core retailing group, which excludes motor vehicle retail and service outlets, increased 0.9% over the same period.

There were expectations that January sales would be flat following the Christmas rush but Statistics New Zealand says the retail sales trend remains positive with sales rising on average by 0.5% a month since May 1998.

"Eleven of the 15 storetypes had increases in seasonally adjusted sales this month. The largest upwards contributors were the food retailing and recreational goods storetypes. These were partly offset by decreases in the motor vehicle retailing and other stores storetypes," Statistics NZ says.

HSBC says the January result sets up the March quarter for another solid rise in retail sales.

"Even if February and March retail sales were flat, nominal first quarter turnover would grow by 1.5%. The likelihood is that it will be even stronger, and that should see consumer spending underpin economic growth in the March quarter just as we expect it did in fourth quarter GDP."

HSBC says the latest figures reinforce the case for the first Reserve Bank rate hike occurring before mid-year. It forecasts the central bank will raise rates by 25 points in May.

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