- Tehseen Islam, business indicators manager
New Zealand retail sales volume rose less than expected in the final three months of 2015, as a decline in motor vehicle sales offset gains in hardware supplies. The volume of retail sales climbed 1.2% in the fourth quarter compared with the previous three months, following a downwardly revised 1.5% pace in the September quarter and compared with a median forecast for an increase of 1.4%. Measured on an annual basis, volumes rose 5.3%, down from the 5.7% pace in the year to September 2015. Hardware, building and garden supplies retailing registered the biggest volume increase in the reported period, surging 5.3%. However, a 1.7% decline in motor vehicle and parts sales from a peak hit in the preceding quarter dragged down the overall figure. Core retail sales, which exclude volatile vehicle-related industries, climbed 1.4% in the fourth quarter. New Zealand consumer spending is being supported by record migration and tourism, low interest rates and a robust housing market. That is helping the nation's economy to offset weaker returns for commodities as prices for dairy products, the country's largest goods exports, remains low.
Separately, business managers expect inflation to be 1.63% annually over the next two years, down from 1.85% in the quarter. This was the lowest level since the second quarter of 1994.
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