March 2012 forecasts
Retail
PDF |Tables
Executive Summary
Forecast Story
Business Conditions
Exchange rate
Financing costs
Labour costs
Non-labour business costs
Profitability
Consumer Demand
Labour market outlook
Income growth
Housing market
Net migration
Tourism
Retail Sector
Retail history
Total retail outlook
Risks to outlook
Retail sectors
Durable good retailing
Clothing and footwear retailing
Accommodation and food services retailing
Regional retail
How affordable is housing?
How indebted are New Zealand households?
Executive Summary
Forecast Story
Business Conditions
Exchange rate
Financing costs
Labour costs
Non-labour business costs
Profitability
Consumer Demand
Labour market outlook
Income growth
Housing market
Net migration
Tourism
Retail Sector
Retail history
Total retail outlook
Risks to outlook
Retail sectors
Durable good retailing
Clothing and footwear retailing
Accommodation and food services retailing
Regional retail
How affordable is housing?
How indebted are New Zealand households?
Stuck in a holding pattern | Executive SummaryPDFWith a slowing world economy buffeting New Zealand with headwinds, and certain bumps delaying the take-off of the Christchurch rebuild, it seems like those waiting to land at the economic growth party will be stuck in a holding pattern for a while yet. But don't worry, the party will be a welcome release after years of hibernation, and would-be revellers still have enough fuel to circle safely as they wait for it to begin – without undue fear of an impending crash landing.
Forecast StoryIt looked touch-and-go for a while in late 2011, but the political response in Europe looks to have prevented the global financial system from plunging into a repeat of the problems seen in 2008/09. Prospects for European and, to a lesser extent, Asian economic growth this year are weaker than we had previously expected, and commodity prices will also ease further until mid-2012. Persistent aftershocks in Christchurch are also hampering the rebuild process, and we now forecast economic growth to remain below 3%pa throughout 2012 and 2013.
Business ConditionsTrading conditions in the retail industry
have been notoriously difficult since late 2007. Starting with a collapse in
consumer demand as the housing market stalled and interest rates climbed, the
industry had to deal with a large drought, spiking fuel and food prices, a
global financial crisis, and a sustained period of inaction in the general
economy.
Exchange rateThe New Zealand dollar will come under some
downward pressure in the near-term, but will push to new post-float highs
during 2013.
Financing costsThe combination of surprisingly weak
inflation, uncertainty from Europe, and patchy domestic economic indicators
will keep the official cash rate at 2.5% throughout this year.
Recent releases
RetailMigration 21/05/2012
Apr 12 | annual (net): -4,006
Retail sales 14/05/2012
Mar qtr 12 | excl. auto volume a.p.c: 3.3%
Electronic transactions 11/05/2012
Apr 12 | a.p.c. 1.1%
Employment 3/05/2012
Mar qtr 12 | unemployment rate: 6.7%
Borrowing / lending 1/05/2012
Mar qtr 12 | housing debt a.p.c: 1.3%
Labour market 1/05/2012
Mar qtr 12 | Unadjusted LCI a.p.c: 3.3%
Monetary policy 26/04/2012
Apr 12 | OCR: 2.50% (prev. 2.50%)
CPI - inflation 19/04/2012
Mar qtr 12 | a.p.c: 1.6%
Credit cards 23/03/2009
Feb 09 | billings in NZ a.p.c. -6.4%
Apr 12 | annual (net): -4,006
Retail sales 14/05/2012
Mar qtr 12 | excl. auto volume a.p.c: 3.3%
Electronic transactions 11/05/2012
Apr 12 | a.p.c. 1.1%
Employment 3/05/2012
Mar qtr 12 | unemployment rate: 6.7%
Borrowing / lending 1/05/2012
Mar qtr 12 | housing debt a.p.c: 1.3%
Labour market 1/05/2012
Mar qtr 12 | Unadjusted LCI a.p.c: 3.3%
Monetary policy 26/04/2012
Apr 12 | OCR: 2.50% (prev. 2.50%)
CPI - inflation 19/04/2012
Mar qtr 12 | a.p.c: 1.6%
Credit cards 23/03/2009
Feb 09 | billings in NZ a.p.c. -6.4%
ReportsRetail Report, March 2012
(2/04/2012)
Retail Report, February 2012
(2/03/2012)
Retail Report, February 2012
(2/03/2012)
Retail Report, January 2012
(1/02/2012)
Retail Report, November 2011
(1/12/2011)
Retail Report, October 2011
(31/10/2011)
(2/04/2012)
Retail Report, February 2012
(2/03/2012)
Retail Report, February 2012
(2/03/2012)
Retail Report, January 2012
(1/02/2012)
Retail Report, November 2011
(1/12/2011)
Retail Report, October 2011
(31/10/2011)
Retail Report, April 2012 1/05/2012There are significant mixed signals for the outlook for the retail industry. On the plus side, consumer confidence has improved, housing market activity is picking up, and the cost of essential foods has pulled back significantly from its mid-2011 peaks.
Record outflow on weak labour market 21/05/2012Apr 12 | annual (net): -4,006
Permanent arrivals to New Zealand dropped 15% between March and April (seasonally adjusted). Although some pull-back was anticipated, this drop took monthly arrivals to their lowest level since November 2005. With the domestic labour market weaker than we had allowed for, the Australian labour market stronger, and global uncertainty rising, net migration could remain negative for the remainder of 2012.
End of Cup spending 14/05/2012Mar qtr 12 | excl. auto volume a.p.c: 3.3%
In the March quarter, the volume of core (non-automotive) retail sales fell by 2.5% from December (seasonally adjusted). However, sales in the September and December quarters had been temporarily pushed up by the Rugby World Cup. After accounting for this, the data shows that overall retail sales have been picking up at a moderate pace during the past year. But with unemployment elevated, we expect retail spending to rise only slowly during the rest of 2012.