Pre-Christmas cheer as retail figures rise

By SIMON HENDERY

The retail sector had another strong month in October - seasonally adjusted retail sales rose 0.8 per cent over September, beating market expectations of a 0.5 per cent rise.

Of the 15 "storetypes" monitored by Statistics NZ, 13 recorded rises for the month.

The exceptions were motor vehicle sales and accommodation, hotels and liquor. Car sales have fallen 1.4 per cent since May.

Deutsche Bank chief economist Ulf Schoefisch said the latest figures equated to an annualised growth rate of 4.5 to 5 per cent, considerably lower than the corresponding figure of close to 10 per cent recorded earlier this year.

This was consistent with the weakening in consumer confidence over the past six months, Schoefisch said.

"While Auckland continues to look relatively strong, the regions affected by a significantly lower dairy sector payout have lost some steam.

"We expect the two-speed pattern between urban and regional parts of the economy to continue for a while. Strong migrant inflows into Auckland are continuing to underpin house sales and construction activity in the city."

UBS Warburg chief economist Robin Clements said that although too much should not be read into a single month's figures, the October statistics showed a positive start to the December quarter.

He said other related indicators - including low mortgage rates, low unemployment, buoyant house prices and consumer confidence - suggested it should be a successful Christmas for retailers.

The October rise follows a 0.1 per cent decrease in September, although the September quarter was up 1.1 per cent.

Actual sales were 8.6 per cent up on the previous October, at $4.25 billion.