(Updates with economist’s comment in fourth paragraph.)
June 15 (Bloomberg) -- New Zealand retail sales increased for the first time in three quarters, adding to signs the economy is recovering from the deadliest earthquake in 80 years.
Sales, adjusted for inflation, rose 0.9 percent in the first quarter compared with the three months ended Dec. 31 when they fell 0.4 percent, Statistics New Zealand said in Wellington today. The increase matched the median estimate of 12 economists surveyed by Bloomberg News.
Rising consumer spending and employment add to evidence the nation’s economy grew modestly in the first quarter, buoyed by record-low interest rates and a surge in commodity prices. Continued growth in domestic demand this year may prompt central bank Governor Alan Bollard to raise interest rates as early as the fourth quarter, according to eight of 16 economists surveyed by Bloomberg News.
“Consumer spending made a welcome return after going missing in action late last year,” said Mark Smith, an economist at ANZ National Bank Ltd. in Wellington. “Recent indicators suggest that the labor market recovery is continuing to pick up steam and this will boost household incomes. Buoyant primary sector incomes are another pillar of support.”
New Zealand’s dollar was little changed after the report. It bought 81.84 U.S. cents as of 11:45 a.m. in Wellington from 81.88 cents immediately before the data.
Today’s report showed sales rose at eight of 15 store categories surveyed in the first quarter. Core sales, which exclude vehicle dealers and fuel outlets, gained 0.7 percent.
First-quarter sales were led higher by a 6.3 percent rise in vehicle and parts sales, today’s report showed.
Fuel sales fell 3.9 percent while supermarket and grocery store purchases declined 0.4 percent.
Sales before adjustment for price movements rose 2 percent, the biggest gain in four years, the statistics agency said. Core sales before adjustment for price changes rose 0.9 percent.
Christchurch, New Zealand’s second-biggest city, was hit by a magnitude 6.3 earthquake in February that killed more than 180 people, the most since a temblor in Napier in 1931. Roads and homes were wrecked, and the central business district closed to allow demolition of more than 400 buildings.
Two more quakes struck the city on June 13, stopping recovery and damaging more buildings. The temblors also meant the statistics agency was unable to provide a full commentary on today’s report, it said.
Response rates and other information from Christchurch retailers confirm that the series remains “robust” after the February earthquake, the agency said.
Sales before price adjustments fell 2.2 percent in Christchurch and surrounding districts, led by accommodation and food and beverage services, the agency said. Liquor and hardware sales in the region were higher.
Warehouse Group Ltd., the nation’s biggest discount retailer, said on May 13 that sales rose 1.4 percent in the three months ended May 1 from a year ago. Increased demand for household consumables, home appliances, bedding, storage and other essentials was evident at its Christchurch stores, the Auckland-based retailer said.
New Zealand’s employers added 30,000 workers in the first quarter, the biggest increase since the second quarter of 2008, according to a government report on May 5. Prices of New Zealand exports rose 6.3 percent in the three months through March, led by demand for milk and lumber, buoying farm incomes.
Bollard kept the official cash rate unchanged at a record- low 2.5 percent on June 9. The central bank estimated gross domestic product grew 0.3 percent in the first quarter after 0.2 percent growth in the final three months of 2010. First-quarter construction slumped 6.3 percent and export volumes fell 0.3 percent, according to government figures released in the past two weeks.
--Editors: Iain Wilson, Chris Bourke
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