Analysts at ANZ note that the New Zealand’s retail sales volumes were unchanged in Q3, versus expectations for a 1.0% q/q lift.
Key Quotes
“The quarter incorporates a boost from the Families Package, with a partial offset from higher petrol prices. Annual sales volume growth slowed from 3.1% to 2.7%. In nominal terms, spending was up 0.6% over the quarter, reflecting rising prices, particularly for petrol.”
“Despite the flat headline, a 0.4% q/q lift in the core measure shows retail spending still has a pulse, but annual growth continued to moderate here too. In trend terms, retail spending growth was unchanged at 0.5% q/q, well below 2017’s average of 1.2%.”
“Today’s print presents some downside risk to our preliminary forecast for Q3 GDP growth of 0.6% q/q. However, there is much more information to come yet and we will update our pick as more pieces of the puzzle roll in.”
“Overall, we expect consumption (and retail spending) growth to remain modest from here. High levels of household debt, weakening population growth, moderating consumer confidence, and some wobblier signals around the global backdrop appear to be offsetting the impacts of low interest rates and a strong labour market. We don’t see that balance changing any time soon.”
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