Retail spending growth slows in New Zealand

Growth in New Zealand retail spending was slower than expected in the quarter ending December 2013, but commentators say they still expect the Reserve Bank of New Zealand (RBNZ) to start lifting interest rates again next month. The volume of retail trade sale in the last quarter rose by 1.2 percent, following a rise of 0.2 percent in the previous quarter, the government statistics agency announced Monday. "Nine of the 15 retail industries had higher sales volumes in this latest quarter," Statistics New Zealand industry and labor statistics manager Blair Cardno said in a statement. The largest increases in December were the 5.7-percent rise in fuel, a 9.9-percent rise in clothing, footwear and accessories and an 8.6-percent rise in recreational goods. The volume of sales in the core retailing industries, which excludes the vehicle-related industries, rose 0.7 percent. The total value of retail sales rose 1.2 percent, or 221 million NZ dollars (185.3 million U.S. dollars), with sales rising in 11 of the 15 retail industries. For the core retail industries, sales rose 1 percent, or 143 million NZ dollars (119.9 million U.S. dollars). An Economic Update from the ASB Bank said the rate of growth was "fairly modest" and the figures seemed at odds with other indicators of consumer spending. "The main areas of weakness are also quite surprising given the rate of population growth, growth of online spending and visitor arrivals numbers. We would hesitate to read too much into one piece of (often quite volatile) data when other indicators all seem to be telling a somewhat different story," it said. The data also suggested that prices were no longer falling and with other indicators pointing to slowly rising price pressures, the bank continued to expect the RBNZ to gradually lift the official cash rate (OCR) from next month. The RBNZ has held the OCR at the historic low of 2.5 percent since March 2011.