Retail sales rebound in May

Retail sales in May rose a stronger than expected 1.3 per cent from April, Statistics New Zealand said today.

Economists had forecast a 0.3 per cent rise.

Excluding car sales, seasonally adjusted sales rose 0.8 per cent.

Actual sales were up 6.3 per cent from May 2005 compared with economists' forecasts of a 4.2 per cent rise.

Increases in seasonally adjusted sales were recorded for 15 of the 24 retail industries in May.

Department stores and automotive fuel retailing contributed over half of the increase in seasonally adjusted sales.

The largest decrease in seasonally adjusted sales was for supermarkets and grocery stores, down $17 million compared with April.

On a regional basis, four of the six regions reported increases in seasonally adjusted sales for May compared with April. Canterbury had the largest percentage increase, up 1.4 per cent, while Auckland had the largest dollar increase, up $15m.

BNZ economist Craig Ebert said the date did not deny consumer spending growth was still on a decelerating path, "but for the most part it seems to be a soft landing".

"It's still likely we may not be in for any sort of growth in volume terms in the June quarter because the nominal growth is all due to inflation."

Citibank economist Annette Beacher said that on the face of it, the numbers were surprisingly strong and clearly supported the Reserve Bank's resolve not to ease policy.

"However, the numbers have been so volatile in recent months that we have to suspect there's some sort of seasonal adjustment problem going on.

"It makes it very hard to discern any clear trend in sales and greatly lessens the value of this data when trying to judge the true state of the economy."

- NZPA