NZ retail sales fall in Q3, more rate cuts seen
Reuters - 1 hour 26 minutes ago
By Gyles Beckford
WELLINGTON, Nov 13 - New Zealand retail sales fell for the third quarter in a row in the three months to September, backing views the country's recession has deepened and the central bank will keep cutting interest rates.
Sales volumes, which strip out price movements, dropped a less than expected 0.9 percent on the previous quarter, seasonally adjusted, with core sales down 0.2 percent.
It was the first time since March 1997 there had been three consecutive quarterly declines in sales volumes. A Reuters poll had a median forecast of a 1.3 percent fall in volumes.
"This adds to the case for a 100 basis-point rate cut from the RBNZ, along with further easing next year," said RBC Capital Markets senior economist Su-Lin Ong.
"The figures confirm the dire fundamentals for consumption in New Zealand."
The New Zealand dollar <NZD=> was little changed after the data at about $0.5594/04. Interest rates were unmoved.
The data was seen as a further sign of the weakness of the New Zealand economy, which has been in recession since the beginning of the year.
Economists have said it is likely the third quarter will also show the economy contracted.
The Reserve Bank of New Zealand cut its cash rate by one percentage point to 6.5 percent last month, to help cushion the rapidly slowing economy from global market turmoil.
All 16 analysts in a Reuters poll expect a further cut of at least 50 basis points in the Dec. 4 monetary policy statement.
Statistics NZ said the fall in sales volumes was driven by lower vehicle sales and vehicle related services sales, and grocery and supermarket sales, which offset rises in department store and appliance sales.
Seasonally adjusted sales for the month of September rose 0.1 percent, with core, ex-auto, sales down 0.5 percent.
Last week three of the country's bigger retailers said trading was tough and sales were lower.
The Warehouse Group <WHS.NZ> said sales in the three months to Oct. 26 were down 2.1 percent on a year ago, homeware and sports goods retailer Briscoe Group <BGR.NZ> said sales were 11.1 percent lower, and clothing chain Hallenstein Glasson <HLG.NZ> reported a 6.7 percent sales drop.
New Zealand consumer confidence recovered in the September quarter from a 17 year low, with sentiment just in positive territory in the last Westpac McDermott Miller. But the survey was taken before the last bout of global market turmoil.
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