NZ: Retail Trade


Sun May 20 17:45:00 CDT 2018

Actual Previous Revised
Q/Q percent change 0.1% 1.7% 1.4%
Y/Y percent change 3.0% 5.4%

Highlights
New Zealand retail trade sales volumes rose 0.1 percent on the quarter in the three months to March (seasonally adjusted), slowing from a revised increase of 1.4 percent in the three months to December. Year-on-year growth in sales volumes slowed from 5.4 percent in the three months to December to 3.0 percent in the three months to March.

The value of retail sales rose 0.2 percent on the quarter in the three months to March, also down from an increase of 1.7 percent in the three months to December. Year-on-year growth in the value of retail sales moderated from 6.3 percent to 3.4 percent.

Stronger headline growth in the three months to December largely reflects weaker spending on food, with food and beverage services, supermarket and grocery stores, and specialised food retailers all seeing significantly weaker quarterly growth in both volumes and value terms. Spending in other parts of the retail sector was also weaker in most categories, with core retail trade volumes increasing by 0.6 percent on the quarter in the three months to march after an increase of 1.8 percent previously. Spending on motor vehicles and fuel also weakened in both volume and value terms.

Definition
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.

Description
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.