NZ: Retail Trade

Sun Nov 15 15:45:00 CST 2015

Consensus Actual Previous
Q/Q percent change 1.4% 1.6% 0.1%
Y/Y percent change 4.6% 4.2%

September quarter retail sales were up 1.6 percent. Seasonally adjusted sales added 1.4 percent and were up 4.6 percent on the year. Sales growth was led by large gains in motor vehicles. The total sales value was $19.2 billion in the September 2015 quarter, 4.8 percent ($874 million) more than in the September 2014 quarter. The motor vehicle industry contributed almost a quarter of the total increase with a $193 million rise on the same quarter last year.

Ten of the 15 retail industries had higher seasonally adjusted sales volumes. Motor-vehicle and parts were up 5.0 percent, electrical and electronic goods were up 6.6 percent and food and beverage services, up 2.4 percent.

Retail trade data tracks changes in New Zealand retail sales. As consumption contributes heavily to New Zealand's GDP, a rising retail sales figure can be indicative of rising demand and subsequent inflation. While strong economic growth is typically good for the New Zealand economy, uncontrolled growth and rising inflation may lead to instability and corrective action from New Zealand's central bank. The release was recently changed from monthly to quarterly. The headline numbers are the percentage change in retail trade from the previous quarter and the percentage change in retail trade from the previous year.

Consumer spending accounts a large portion of the economy, so if you know how consumers are behaving, your will have a good indication as to where the economy is headed. Needless to say, that is a big advantage for investors. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.