Retailers are enjoying a spring sales lift, says Stats NZ, with latest numbers showing a $49 million increase - 1.2 per cent for August.
Total retail sales were up 1.1 per cent with two-thirds of all retail industries showing increases. These increases follow a fall in July, when core retail
numbers were down 0.6 per cent and total retail down 0.5 per cent.
Biggest movers in the core industries - which exclude vehicle-related sector, were clothing and 'softgoods' which rose 6.5 per cent, and hardware retailing, which was up 7.2 per cent. An unusually warm August is being tipped as one of the reasons for this jump in clothing sales.
The trend in total retail sales has been rising since February this year, says Stats NZ, and has increased 1.4 per cent since then, following a 13-month period of decline.
Economist Bernard Doyle, from Goldman Sachs JBWere said while the numbers were "stronger than we and the consensus expected, the recovery in retail continues at a fairly gradual pace".
The recent (and more timely) electronic receipts data suggested September saw further recovery in core sales growth, said Doyle.
While recent data was "probably running head" of the Reserve Bank's expectations, Doyle said he doubted the divergence would be enough to change its monetary policy deliberations.
When it came to this, housing market activity in the last quarter of the year, was "probably a more decisive indicator."
UBS economist Robin Clements said the August retail sales data was "well ahead of expectations but the inclination is to look for reasons to downplay the surprise somewhat."
"Clothing sales may well have been affected by what appeared to be an early start to spring, with August the warmest on record. Also, higher petrol and diesel prices in August contributed to the rose in sales value for automotive fuel retailing."
"One month of retail data is not going to be definitive, especially as the August surprise was making up for disappointment in July. However, consumer confidence is pointing to far better performance for retailing in the period ahead (supported by the recovery in housing), so there has to be some recognition of the possibility that a good retail month could spell the beginning of an improving trend."
Jane Turner, ASB Bank economist said the retail pick up was reasonably broad-based with many sectors registering an increase in sales over the month.
The "unseasonably warm weather" in August potentially helped early spring clothing sales.
"There is some evidence suggesting the strong ski season could have helped prop up sales over August, with the strongest growth in sales recorded outside of the main centres," she said.
However, over the past year much of the recovery in sales has been led by Auckland, said Turner.
"… the pick up over August does highlight the improved optimism on the consumer spending outlook. Consumer confidence has picked up firmly over recent months. In addition, retail spending volumes should also be supported by the current surge in net migration. We do expect a slow recovery in consumer demand to continue over the next year, " she said.
-NZ HERALD STAFF
