Long awaited growth in New Zealand’s retail sales has strengthened the notion that the economic turmoil in the country might just be on the verge of getting over.
Second quarter of 2009 was the first quarter of positive growth for the retail sales in the past seven quarters, and thus, supporting the belief that New Zealand’s economy is gradually improving from the recession blow, reported
Forbes.
The retail spending, in dollar terms, registered its first positive growth of 1.1% for over a year, whereas sales by volume surged 0.4% in what was their first growth since September 2007 quarter. The seasonal adjusted sales were up 0.2% during April-June 2009 as compared to the previous quarter, excluding automobile, suggested the official data.
This upsurge followed the longest term of quarterly declines in sales volumes. In Q1 2009, the sales volume registered a record decline of 2.7%.
Retail sales in New Zealand surged mainly because of the revival in housing sector as well as improvement in consumer confidence. These factors added to the implications that the country’s worst economic recession in three decades is approaching towards its end. Consumer confidence is continuously recovering, raising the hopes for the return of positive growth in spending during the latter half of 2009.
A survey by Westpac Banking Corp. and McDermott Miller Ltd. claimed that consumer confidence surged to an 18-month high during the quarter ending June 2009.
It is noted that the retailers in New Zealand have been facing hard times since the second half of 2007. At first, the spending was eroded by high rates of interest and soaring petrol prices. Then, the recession made the situation all the more unbearable for the retailers.
However, recent profit announcements from retail giants, including Hallenstein Glasson Holdings and Briscoe Group, indicate that despite the constrained spending, activity in retail industry has now been improving, though at much lower levels from that seen in the initial years of the current decade.
According to a Research Analyst at
RNCOS, “Second half of 2009 is expected to see stronger revival in New Zealand’s economy. Higher prices of the houses and lower interest rates have already started encouraging people for dining out, besides propelling the demand for appliances.”
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