NZ: Retail spending fell by 0.5% in May - Westpac

Satish Ranchhod, senior economist at Westpac, points out that New Zealand’s retail spending was much weaker than expected in May, falling by 0.5% (vs. expectations for a 0.5% increase).

Key Quotes

“In annual terms, spending was up 4.4% over the past year.”

“May’s fall in spending was wide-spread across retail categories. In part, this softness may have been due to the continued high level of petrol prices which has siphoned money out of households’ wallets and constrained spending in other areas.”

“One particularly notable trend is the flattening off of households’ spending on durable items. Spending on these items has been trending sideways since late 2018. This likely reflects the softening in the housing market over the past year.”

“With lingering softness in the housing market to date, we expect to see only moderate growth in retail spending over the coming months.  However, spending is set to pick up later this year, supported by growth in nominal incomes, increases in government spending and lower mortgage rates.”