Satish Ranchhod, senior economist at Westpac, notes that the New Zealand’s retail spending was weaker than expected in March, falling by 0.3% over the month, while annual retail spending growth has also taken a step down over the past year, slowing to just 0.7%.
Key Quotes
“In part, the softness in spending was due to the increase in fuel prices over March. That siphoned money out of households’ wallets, and constrained spending in other areas.”
“However, the weakness in spending was not just due to higher fuel prices. Spending in the hospitality sector was flat in March. And there were outright declines in spending on apparel and durables.”
“This softness in spending is consistent with the recent easing in consumer confidence, as well as the slowdown in the housing market.”
“Looking to the year ahead, we expect only moderate growth in retail spending. That will be supported by growth in nominal incomes, increases in government spending and low mortgage rates. However, the slowdown in the housing market will be an important drag.”
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