11.00am - By SIMON LOUISSON
Seasonally adjusted retail sales rose a much stronger-than-anticipated 1.2 per cent in July, continuing the economy's recent pattern of positive surprises.
Economists had expected seasonally adjusted sales to fall by around 0.2 per cent.
Excluding car-related sales, the rise was an even more pronounced 1.6 per cent.
Statistics New
Zealand said today that actual sales for the year to July rose 7.9 per cent against economists' forecast of 6.2 per cent.
For all this year, private sector economists and Reserve Bank (RB) and Treasury economists have been anticipating an economic slowdown, but it has failed to eventuate.
The RB is now forecasting economic growth of 4.0 per cent in the year to March 2005, but even that may be an underestimation.
Recent trade figures have shown that New Zealand's terms of trade are at 30-year highs and export volumes have also been surging.
The bank last week hiked interest rates for the fifth time this year and is threatening two more hikes by the end of year.
The official cash rate is now 6.25 per cent.
With statistics like today's showing persistent strength in the economy, those rate hikes look more assured.
Seasonally adjusted sales also rose 1.2 per cent in June.
In the month of July, department stores led the growth with an 8.1 per cent, or $22 million, rise in sales.
Fourteen of the 24 retail industries increased sales.
The personal and household goods hiring group had a 7.3 per cent increase, while recreational goods shops had a 5.4 per cent rise.
The takeaway goods group was the worst performing group during the month with a 6.6 per cent fall in sales.
Liquor retail sales fell 1.9 per cent.
North Island sales were up a seasonally adjusted 1.0 per cent, while South Island sales were up 0.8 per cent.
The regions are seasonally adjusted differently from industry groups.
Waikato had the strongest performance with a 1.9 per cent lift followed by Auckland with 1.4 per cent and Canterbury with 1.1 per cent.
Wellington was the only region to record a fall, with a 0.6 per cent drop.
- NZPA
