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NEW ZEALAND: Retail Volumes Stronger Than Forecast, Discretionary Spending Firms

NEW ZEALAND
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New Zealand Q4 2024 retail sales (ex inflation) were stronger than forecast, rising 0.9%q/q, against a 0.5% market expectation. The Q3 dip of 0.1%q/q, was also revised higher to flat. 

  • This was the firmest q/q print since the end of 2021.  Stats NZ noted: "Ten of the 15 retail industries had higher retail sales volumes in the December 2024 quarter, compared with the September 2024 quarter, after adjusting for price and seasonal effects."
  • "The biggest contributors to the rise in retail activity in the December 2024 quarter were: electrical and electronic goods retailing – up 5.1 percent, department stores – up 4.2 percent, accommodation – up 7.6 percent, food and beverage services – up 2.3 percent."
  • This hints at some return of discretionary spending, with most of these categories negative in parts of 2024. This shows the impact of RBNZ easing beginning to benefit parts of consumer spending.
  • The chart below shows the level of retail sales volumes. We are still comfortably sub 2021 cycle highs. In y/y terms, Dec retail sales volumes were close to flat. 

Fig 1: NZ Retail Sales Volumes - Level 

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New Zealand Q4 2024 retail sales (ex inflation) were stronger than forecast, rising 0.9%q/q, against a 0.5% market expectation. The Q3 dip of 0.1%q/q, was also revised higher to flat. 

  • This was the firmest q/q print since the end of 2021.  Stats NZ noted: "Ten of the 15 retail industries had higher retail sales volumes in the December 2024 quarter, compared with the September 2024 quarter, after adjusting for price and seasonal effects."
  • "The biggest contributors to the rise in retail activity in the December 2024 quarter were: electrical and electronic goods retailing – up 5.1 percent, department stores – up 4.2 percent, accommodation – up 7.6 percent, food and beverage services – up 2.3 percent."
  • This hints at some return of discretionary spending, with most of these categories negative in parts of 2024. This shows the impact of RBNZ easing beginning to benefit parts of consumer spending.
  • The chart below shows the level of retail sales volumes. We are still comfortably sub 2021 cycle highs. In y/y terms, Dec retail sales volumes were close to flat. 

Fig 1: NZ Retail Sales Volumes - Level 

Keep reading...Show less