MNI New Zealand Q2 Retail Sales Up; Rebound In H'Hold Spend

By Sophia Rodrigues

     SYDNEY (MNI) - New Zealand retail sales rose more than expected in the

second quarter, suggesting a rebound a household consumption and reducing

downside risk to the Reserve Bank's monetary policy.

     Data published by Statistics New Zealand Wednesday showed retail sales rose

1.1% q/q in Q2, beating MNI median forecast for a small 0.3% rise. Importantly,

the Q2 gain follows an upward revision in Q1 sales to +0.3% from +0.1%

originally reported.

     The largest contribution to Q2 sales came from hardware, building and

garden supplies that rose 4.7% q/q after a small 0.6% rise in Q1.

     Recreational goods rose 4.9% q/q, rebounding strongly from three straight

quarters of decline and indicating households' confidence in making

discretionary spending.

     Department stores rose 2.%, and electrical and electronic goods rose 2.0%.

Core retail sales rose 1.4%, after a 0.6% rise in Q1. Fuel sales fell 0.7% q/q

to mark the fourth consecutive quarterly fall. 

     The RBNZ forecasts assume a 0.9% q/q rise in household consumption in Q2

after a flat Q1, and the Q2 retail sales growth appears to be in line with the

forecast.

     Retail trade survey for the second quarter:

                                                  Q2                          Q1

--------------------------------------------------------------------------------

                               (seasonally-adjusted)       (seasonally-adjusted)

Retail Sales Volume                            +1.1%  +0.3% (revised from +0.1%)

MNI median forecast                            +0.3%

Core Retail Sales                              +1.4%                       +0.6%

Main Contributors:

Motor Vehicle and Parts                        +0.4%                       -0.3%

Fuel Retailing                                 -0.7%                       -1.7%

Supermarket and Grocery

Stores                                         -1.1%                       +1.0%

Liquor                                         -0.4%                       +2.3%

Hardware, Bldg, Garden                         +4.7%                       +0.6%

Accommodation                                  +1.2%                       -1.4%

Recreation Goods                               +3.2%                       +1.9%

Retail Sales Value                             +1.3%                       +0.3%

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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