- New Zealand retail sales slowed sharply in the March quarter, increasing by just 0.1% in volume terms.
- The result was below even the most pessimistic forecast offered by economists.
- Including price changes, spending rose by 0.2%, driven entirely by higher fuel prices.
New Zealand retail sales slowed sharply in the March quarter, according to data released by Statistics New Zealand (StatsNZ) today.
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Excluding price effects, sales volumes grew by a paltry 0.1% in the three months to March in seasonally adjusted terms, coming in below even the most pessimistic forecast offered by economists.
It was also well below the 1.4% gain seen in the December quarter of last year, and saw the annual rate of growth slow sharply from more than 5% to just 3%.
“Retail spending in the first three months of the year was relatively flat despite rising job numbers, high migration, and record international tourism,” StatsNZ said in a statement.
“Of the 15 retail industries, seven had higher sales volumes in the March 2018 quarter, and eight experienced lower sales volumes.”
Including price movements during the quarter, the value of sales increased by just 0.2%, or $NZ58 million, to $NZ23.1 billion, significantly slower than the 1.7% gain recorded three months earlier.
All of the gain was due to higher fuel prices, StatsNZ said.
“Fuel retailing had the largest rise, up 3.4%, or $NZ70 million,” it said.
Along with a slowdown in annual net migration in the year to April, according to separate data released by StatsNZ, the data has weighed on the New Zealand dollar, seeing it give back earlier gains.
The NZD/USD currently buys .6908, down 0.03% from Friday’s close. It had been as high as .6933 earlier in the session.
“We expect that household spending growth will remain modest over the coming year as the housing market cools in response to government policy changes,” says Satish Ranchhod, Senior Economist at Westpac Bank.
“Population growth is also expected to ease back gradually over the next few years. Indeed, today’s lower than expected net migration result reinforced that view.
“This signals downside risk to our Q1 GDP forecast and chimes with other signs that the economy is slowing.”
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