Sales at New Zealand retail stores rose the most in six years in the fourth quarter, led by fuel and building supplies, adding to signs of a recovery and sending the local currency higher.
Sales adjusted for inflation surged 2.1 percent in the three months through December from the third quarter, when they fell a revised 0.2 percent, Statistics New Zealand said in Wellington today. The gain was the most since the fourth quarter of 2006 and exceeded the 1.4 percent median estimate in a Bloomberg News survey of 10 economists.
Stronger retail spending, rising house prices and an expansion in manufacturing suggest domestic demand recovered in the fourth quarter after almost stalling in the three months through September. New Zealand’s dollar gained as investors bet the central bank may raise interest rates by October as the economic pick-up begins to put pressure on inflation.
“Retailers have been the most upbeat of businesses in recent surveys,” Craig Ebert, senior economist at Bank of New Zealand Ltd. in Wellington, said in a Feb. 11 research note. He expects a rate increase in December.
New Zealand’s dollar has gained 2.4 percent this year following a 6.6 percent advance in 2012. It bought 85.13 U.S. cents at 10:57 a.m. in Wellington from 84.63 cents immediately before the release.
The Reserve Bank of New Zealand has kept the benchmark interest rate at a record-low 2.5 percent since March 2011 to help spark a recovery after earthquakes in the city of Christchurch stalled activity in the nation’s third-biggest urban area.
Traders are betting there’s a 61 percent chance of a rate rise by October, according to swaps data compiled by Bloomberg.
Central bank Governor Graeme Wheeler said Jan. 31 that economic growth was recovering from softness seen through the middle of last year. Rebuilding in Christchurch will probably help boost incomes and domestic demand, he said.
Finance Minister Bill English yesterday told a parliamentary committee the economy was headed for moderate growth, and is performing better than many of the nation’s larger trading partners.
New Zealand’s manufacturing industry expanded in January at the fastest pace since May, according to a report yesterday. House prices rose 6.2 percent last month from a year earlier, the fastest annual increase since March 2008, Quotable Value NZ said Feb. 11.
Clothing retailer Hallenstein Glasson Holdings Ltd. today said sales rose 6.6 percent in the six months ended Feb. 1 from the year-earlier period. Purchases in the December-January shopping period were “robust” and margins improved, the company said in a statement sent to the stock exchange.
Today’s report showed sales rose at 12 of 15 store categories surveyed. Core sales, which exclude vehicle dealers and fuel outlets, gained 1.5 percent from the third quarter, when they were unchanged.
Fuel purchases gained the most in four years, rising 7.7 percent from the third quarter, today’s report showed. Hardware, building and gardening supplies sales growth exceeded 4 percent for a second-straight quarter, led by demand in Canterbury amid increased earthquake rebuilding, the statistics agency said.
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