Consumers rediscovered the urge to buy earlier this year, and it should be enough to help the economy avoid slipping back into recession.
The latest figures from Stats NZ show retail sales volumes, which exclude price movements, rose 2.5% in the three months ended March in the previous quarter, when they fell 2.7%. %.
According to Stats NZ, buyers spent $ 26.4 billion in the quarter, with notable increases for electrical and electronic items, hobby products, and construction and garden products.
Westpac senior economist Satish Ranchhod said retail spending has been resilient since the economy emerged from lockdown, even in the absence of international tourists.
“Spending appetites have been supported by the low level of interest rates, the strength of the housing market and the diversion of spending previously reserved for overseas vacations into the local economy,” Ranchhod said.
“We expect spending to continue to strengthen over the next few months. However, compared to pre-Covid trends, spending growth is likely to be constrained by the continued shortage of international tourists and slowing population growth.”
The largest decline was in retail fuel sales, down 2.2%, with smaller declines in online and pharmaceutical sales.
Most economists have chosen stable economic activity for the first three months, with the risk of a slight contraction, which, added to the 1.0% drop in the last quarter of last year, would have meant two consecutive quarters. negative growth, meeting the definition of a recession.
“Overall, today’s data adds to our level of confidence that New Zealand’s economy will avoid a technical double-dip recession in Q4 2020 and Q1 2021 – as some say. have predicted, “said Miles Workman, senior economist at ANZ.