New Zealand's retail sales volume increased at the strongest pace in six years in the December quarter on higher fuel and auto spending, as consumer confidence started to recover amid positive views about the prospects of the general economy.
The data helped propel New Zealand dollar to its strongest in 17 months against US dollar while boosting hopes that the economic recovery will gather pace going forward.
Sales volume jumped a seasonally adjusted 2.1 percent quarter-on-quarter in the December quarter after a marginal 0.2 percent decline in the September quarter, the latest figures from Statistics New Zealand revealed Friday.
According to the statistical office, the last time sales volumes rose as strongly was in the December quarter of 2006. Core retail sales increased 1.5 percent.
The result "supports our view that economic growth will continue to gather momentum this year," Michael Gordon, a Senior Economist at Westpac, said.
Data showed that fuel retailing jumped 7.7 percent on a quarterly basis during the period following a 1 percent decline in the September quarter. Sales of motor vehicles and parts gained 2 percent.
Retail trade of hardware, building, and garden supplies rose 4.3 percent from the previous quarter. This is the second large increase in a row for the hardware, building, and garden supplies industry, which was again boosted by stronger-than-usual sales in Canterbury, business statistics manager Blair Cardno said.
"Having persistently expressed skepticism in the housing-led growth story, and over-emphasized the burden from currency strength, market sentiment in New Zealand has turned around significantly in the past few months, and today's 4Q retail sales report will add fuel to that fire," Ben Jarman, an economist at J.P. Morgan Australia, said.
A survey by ANZ and Roy Morgan revealed Thursday that the confidence among New Zealand consumers jumped to its highest in 32 months in February. Consumers felt less worse off financially than a year earlier.
Consumers appeared more positive regarding their own financial prospects in the year ahead and views on the general economy a year out were also better, according to the survey findings.
Despite the upbeat data, the Reserve Bank of New Zealand is widely expected to hold its interest rate at current level until the end of this year.
by RTT Staff Writer
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