Food and beverage sales accounted for much of the latest spending rise. Picture / Bradley Ambrose
Food and beverage sales accounted for much of the latest spending rise. Picture / Bradley Ambrose
KEY POINTS:
Falling petrol prices have helped push up consumer spending in the September quarter.
Retail sales were a seasonally adjusted 1 per cent up on the previous three months, Statistics NZ figures show.
The increase was buoyed by a 1.8 per cent increase for the core retailing group, whichexcludes vehicle-related sales.
While lower prices meant spending on fuel was down in September, the effect was more than offset as relieved consumers spent their money elsewhere.
The rise in core retail sales came largely from food and beverage-related industries, which account for almost half of core retail sales.
Economists say the higher-than-expected figure probably won't prompt Reserve Bank Governor Alan Bollard to raise interest rates next month.
But opinion is divided on the extent to which he should be concerned by the long-term trend.
The market had been expecting a spending rise after a fall during the June quarter. But the level of the rise surprised most economists.
"What really blew us away was the 1.2 per cent surge in nominal retail sales during September itself," said Craig Ebert at the Bank of New Zealand.
Excluding automotive spending, the rise was 2.2 per cent for September and 6.7 per cent from a year earlier, Ebert said.
The numbers would not be enough to shift the official cash rate, but they "would certainly apply the blowtorch", he said.
But UBS economist Robin Clements said that despite short-term volatility a moderating trend was evident.
Core retail activity had grown an average of 0.8 per cent a quarter over the past year - down from an average of 1.5 per cent a quarter in the previous year.
"Yesterday's data was stronger than expected, so that was positive for growth and negative for the Reserve Bank," he said.
"But if you stand back from that ... it's not falling off the edge, but it certainly has softened."
Westpac senior economist Nick Tuffley also felt this was more likely to be a volatile quarter than the start of a trend.
Overall, retail spending had lost momentum in the past year, he said.
