NZD: December Quarter Sees Drop in Retail Sales, NZ Inflation Concerns for Economists
NZ Retail sales Q4 ending December 2023 came at -1.9%. This is the Eighth consecutive fall in the row of retail sales data. Only Pharma sector came at profit out of 15 sectors in NZ.
Retail Sales Dip in Q4 2023, Recreational Goods and Fashion Take a Hit
Three Major Banks Report Weaker Retail Spending Amidst Household Spending, Inflation, and Borrowing Challenges
Stats NZ Reveals $25 Billion in Seasonally Adjusted Retail Sales for December Quarter, Down 1.9% from September
Decline Across All 15 Surveyed Industries Except Pharmaceuticals and “Other” Store-based Retailing
Liquor, Electronics, Furniture, Groceries, Hardware, and Footwear Experience Quarter-on-Quarter Decreases
Recreational Goods Retailing Down 6.1%, Clothing and Footwear Spending Drops $42 Million
NZDUSD is moving in Ascending channel and market has reached higher low area of the channel.
The Warehouse Group’s Sale Raises Speculation on New Grocery Chain, Sparks Retail Sector Health Discussion
Kathmandu Owner KMD Brands Reports 14.5% Drop in Group Sales, Hallenstein Glasson’s Summer Performance Stagnates
Stats NZ’s Retail Trade Survey Measures Sales and Stock for Businesses Providing Household and Personal Goods and Services
Total Seasonally Adjusted Retail Sales Value at $30 Billion, a 1.5% Decrease from September Quarter
Challenging Inflation Scenario
According to Westpac, the retail statistics paint a gloomy picture, anticipating a mere 0.1% growth in GDP for the quarter, likely trailing inflation and population growth.
Westpac senior economist Satish Ranchhod stated today that while uncertain about a technical recession, the New Zealand economy was undeniably slowing down, with persistently high inflation posing the most significant challenge.
Inflation Driven by High Demand and Supply Chain Disruptions, Westpac Predicts No Change in Official Cash Rate
Westpac anticipates the Reserve Bank to maintain the official cash rate (OCR) at 5.5% in the upcoming rates decision, attributing the inflation surge to robust demand and supply chain challenges.
Three Key Challenges Identified
According to Westpac senior economist Satish Ranchhod, several appliance, furnishing, and hospitality businesses are grappling with three major issues in the economy.
Inflation, although decreasing, remains higher than desired. Secondly, the labor market is showing signs of cooling. Thirdly, despite no OCR hike, mortgage holders are facing difficulties, dampening household spending enthusiasm.
Positive Trends in Tourism and Immigration
Ranchhod notes that the ongoing recovery in international tourism is providing a lift, especially for the hospitality sector, helping offset domestic spending weaknesses. High net immigration is also easing the labor crisis, preventing a more significant contraction in activity.
ANZ and ASB Assessments
ANZ expresses concern over retail sales volumes, deeming them worse than expected, with uncertainties about improvement in 2024. ASB reports widespread declines in retail, particularly severe in late 2023 despite strong net immigration. ASB Senior Economist Mark Smith highlights a 1.7% slump in core retail volumes, the largest quarterly drop since the 2021 lockdown. Weak retail spending, despite robust net immigration, indicates the Reserve Bank’s efforts to slow demand and curb inflation are effective.
Living Costs and Monetary Policy Outlook
ASB estimates project households facing up to $70 per week in additional living costs this year. While the OCR may have peaked, ASB suggests additional tightening in the pipeline, with a portion of mortgage lending transitioning to higher rates.
NZD: NZ Retail Sales Down 1.9% for Eighth Consecutive Quarter
NZ Retail sales Q4 ending December 2023 came at -1.9%. This is the Eighth consecutive fall in the row of retail sales data. Only Pharma sector came at profit out of 15 sectors in NZ.
New Zealand’s Retail Sales Drop 1.9% in Q4, Marking Eighth Consecutive Quarterly Decline
QoQ Retail Sales, excluding Autos, also down 1.7%, reflecting a broader economic slowdown.
NZDUSD is moving in Descending channel and market has reached lower high area of the channel
Stats NZ reports a 1.9% decline in total Retail Trade volume for the fourth quarter of 2023, with most sectors experiencing losses, except Pharmaceuticals and store-based retailing.
The quarter’s losses were led by fuel retailing, motor vehicles and parts, and food and beverage services.
Stats NZ highlights this as the first decline in Retail Sales since the national COVID lockdowns in 2020 and 2021, with the last pre-pandemic decline occurring in the quarter ended September 2009.
NZD: Eighth Consecutive Quarter of Retail Spending Decline
NZ Retail sales Q4 ending December 2023 came at -1.9%. This is the Eighth consecutive fall in the row of retail sales data. Only Pharma sector came at profit out of 15 sectors in NZ.
Stats NZ: Retail Sales Volume Drops 1.9% in December 2023 Quarter, Extending Seven-Quarter Decline Trend
Melissa McKenzie, Business Financial Statistics Manager, noted a continued decline in retail activity over the past two years, with most industries experiencing a fall in the December quarter.
In the December 2023 quarter, fourteen out of fifteen retail industries experienced a decline in sales volumes compared to the September 2023 quarter.
NZDUSD is moving in Ascending channel and market has reached higher low area of the channel
Major contributors to the overall decline in retail activity were:
– Motor vehicle and parts retailing, down 2.5%
– Food and beverage services, down 2.4%
– Fuel retailing, down 3.6%
The sole industry showing an increase was pharmaceutical and other store-based retailing, with a 0.3% rise. This category encompasses retail sales of pharmaceuticals, cosmetics, stationery, flowers, duty-free goods, and other store-based items.
Without adjusting for price and seasonal effects, total retail sales values saw a 0.4% decrease in the December 2023 quarter compared to the same period in 2022. This marks the first decline since the nationwide COVID-19 lockdowns in the September 2021 and June 2020 quarters. The last pre-COVID-19 decline occurred in the September 2009 quarter.
Don’t trade all the time, trade forex only at the confirmed trade setups.
Get more confirmed trade setups here: forexgdp.com/buy/
