The total sales value was $19.2 billion in the September 2015 quarter, 4.8 per cent ($874 million) more than in the September 2014 quarter. The motor-vehicle industry contributed almost a quarter of the total increase, with a $193 million rise on the same quarter last year.
After removing the effect of price changes, the total retail sales volume rose 5.7 per cent in the September quarter, when compared with the same quarter last year.
“Several car dealers told us they experienced a very busy September quarter, and were on target to achieve record sales this year,” business indicators senior manager, Neil Kelly, said.
When adjusting for seasonal effects, the volume of total retail sales rose 1.6 per cent in the September 2015 quarter. This increase follows a modest rise of 0.1 per cent in the June 2015 quarter.
Ten of the 15 retail industries had higher seasonally adjusted sales volumes. The largest industry movements were: motor-vehicle and parts retailing, up five per cent; electrical and electronic goods, up 6.6 per cent; and food and beverage services, up 2.4 per cent.
When the effect of price changes is included, the seasonally adjusted total value of retail sales rose 1.4 per cent ($265 million). This follows a 0.3 per cent ($59 million) increase in the June 2015 quarter.
“After pausing for air in June, retail sales growth rebounded in September,” says Satish Ranchhod, senior economist at Westpac
“We’ve seen particular strength in spending on durable items such as furnishings, as well as a pick-up in the purchase of motor vehicles. There have also been strong gains in spending on food products and non-store retailing.”
By region, spending was up strongly in the North Island, especially Auckland and Waikato. In contrast, there has been some pull back in spending in Canterbury.
Today’s report also highlights that inflation in the economy remains subdued.
“Combined with strong population growth and low interest rates, low prices have provided a significant boost to spending,” points out Ranchhod.
“With the labour market softening and the economy facing headwinds domestically and offshore, it is likely that we will see spending growth slowing down over the coming year.”
The implications of today’s data for monetary policy are mixed. The resilience in retail spending through mid-2015 is encouraging. But at the same time, today’s report highlights that inflation in the economy remains subdued. (Westpac estimates that retail prices were down 0.3 per cent over the quarter).
“On balance, today’s data has not prompted us to change our views on a December cut,” says Ranchhod..
There was only a limited fall in the NZD in response to today’s data.