New Zealand: Retail sales rise in September ahead of tax increase
November 15, 2010
Retail sales rose in September, as consumers rushed to buy household appliances before a 15.0% increase on the goods and services tax (GST) became effective on 1 October. In September, nominal retail sales rose 1.6% over the previous month in seasonally adjusted terms, which contrasted the flat reading observed in August and overshot market expectations of a 1.1% rise. The monthly improvement was mainly the result of higher sales in furniture and floor coverings (+30.1% month-on-month) as well as for appliance retailing (+14.4% mom). On an annual basis, retail sales expanded 4.4% in September, which almost doubled the 2.3% increase registered in August. In the third quarter, retail sales added 0.7% in seasonally adjusted terms, which was just half the 1.5% pace registered in the second, but beat market expectations, which had retail sales remaining unchanged. The trend in retail sales continues to point upwards, with annual average retail sales rising from 2.1% in August to 2.5% in September, marking the fastest pace since November 2008.
Author: Ricardo Aceves, Senior Economist