WELLINGTON: Growth in New Zealand’s retail sales slowed in the quarter to the end of June, fueling expectations of further interest rate cuts in the near future.
The total sales value in the June quarter was up 4.1 percent year on year to 18.9 billion NZ dollars (12.35 billion U.S. dollars), following a rise of 5.1 percent in the March quarter, the government’s Statistics New Zealand agency said here the other day.
The total retail sales volume rose 5.9 percent year on year in the June quarter.
The volume of sales was up just 0.1 percent from the previous quarter and followed rises of 2.3 percent in the March quarter and 2.1 percent in the December 2014 quarter.
“Although just over half the industries had sales volume increases this quarter, they were modest in size compared with growth in recent quarters,” business indicators manager Neil Kelly said in a statement.
The largest sales volume increase, 8.1 percent, was in non- store and commission-based retailing, which included online retailers.
Fuel retailing saw the largest sales volume decrease, slipping 0.9 percent.
The Retail New Zealand sector group said the slower growth was disappointing, but not surprising.
The reasons included greater economic uncertainty, particularly bad weather in April and May, and the growth in online retailing, chief executive Mark Johnston said in a statement.
An Economic Update from the ASB Bank said the collapse in world dairy prices and lower farm incomes was likely causing additional headwinds to retail spending.
It said spending growth was expected to be modest for the rest of the year, and it anticipated the Reserve Bank of New Zealand to cut the official cash rate (OCR) by 25 basis points apiece in September and October.
The official cash rate stands at 3 percent after two cuts each of 25 basis points so far this year.
