NZ retails sales could boost GDP Q3 expectations – ANZ

By FXStreet FXStreet (Guatemala) – Analysts at ANZ explained that a number of offsetting forces shape the consumer spending outlook in New Zealand.

Key Quotes:

“Solid net wealth gains, low interest rates and strong population growth are clear supports. However, this is will be moderated to a degree by a softer labour market and weaker rural incomes. Modest, but respectable, spending growth is expected to persist.

Retail sales were boosted by a strong lift in vehicle spending in Q3, and from a regional perspective, outperformance is following housing market strength (led by Auckland, Waikato and the regional North and South Island). Today’s results provide some modest upside risk to our current 0.5% q/q expectations for Q3 GDP.

At 1.6% q/q, the lift today was slightly stronger than expected. While quarterly retail sales volumes have been volatile of late (today’s result follows a soft Q2, but strong Q1), a respectable underlying trend exists (0.9% q/q).

Compositionally, the lift was led by durables. Motor vehicle spending in particular surged 5.0% q/q. Electrical goods spending was also strong. Stripping out motor vehicle relating spending, core spending was up 1.0% q/q. Overall, 10 of 15 industries recorded higher sales volumes over the quarter.

Regionally, strength appears to be following housing markets. Solid …read more

Source:: FX Street