Satish Ranchhod, Senior Economist at Westpac, explains that it was a soft start to the year for New Zealand’s retail spending as after adjusting for price changes, retail spending was essentially flat over the March quarter.
“That was well below analysts’ forecasts, including our own, for a gain of around 1.0%.”
“Much of the weakness in spending was concentrated on vehicle and fuel spending. These were dampened by falls in petrol prices and delays with vehicle importation.”
“Core spending (which excludes the vehicle and fuel categories) was also weaker than expected, rising only 0.6% over the quarter. Looking at the break down of sales, we did see increased spending on electronics and at supermarkets. However, this was offset by continued softness in spending on apparel, as well as reduced spending on hardware, recreational goods and dining out.”
“The cooling in spending growth over the past year has been widespread across the country. It’s been particularly stark in areas like Nelson, Wellington and in ManawatuWanganui. We’ve also seen spending growth slowing in areas like Auckland and the Waikato. In contrast to other regions, spending growth in Canterbury has held up.”
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