KEY POINTS:
Our economy's growing more than expected and New Zealand shops should enjoy ever-growing sales, says new research.
The latest "MasterIndex of Retail" study projects New Zealand retail sales will reach NZ$18.5 billion in total sales value for the second half of 2007, an increase of 4.8 per cent year-on-year.
This comes as Statistics NZ released figures showing our economy expanded by 2.2 per cent in the year to the end of June, up from 1.7 per cent in the March year.
It's likely to mean the Reserve Bank will hold official interest rates at current high levels.
MasterCard said one of the reasons behind a pending jump in retail spending is our tight labour market - along with what the credit card company describe d as "the availability of credit in the market".
Statistics NZ's latest figures showed the make-up of economic growth has changed, the latest rise resulting from companies building up inventories, not from household consumption.
Acting finance minister Trevor Mallard said the country was "effectively at full employment". This meant business was looking more towards capital expenditure.
"The data also shows household consumption growth starting to weaken. We need to see this trend continue. That's why Budget 2007 focused on encouraging saving and investing," Mallard said.
The MasterCard survey is forecasting GDP growth of 1.7 per cent, as dairy export volumes grow and so farm incomes. This compares with Australia, where a 3.5 per cent GDP growth is predicted.
MasterCard said that despite "prosperous retail sales" projections, consumer confidence had dipped slightly.
Retail spending tends to be pretty resilient, said Rozanna Wozniak, chief economist at Arcus Investment Management. The rate of growth did slow in tougher times, but change was seen in the type of spending - with less big ticket purchases.
