Retail sales figures for the December quarter showed strong growth in New Zealand whilst Australia was weak.  New Zealand sales volumes for the core retail industries had its largest seasonally adjusted increase since this series began in 1995, rising 2.9 percent quarter on quarter and 7.5% on the previous year. This record increase follows a strong rise in the September 2011 quarter. In contrast retail sales in Australia fell -0.1% during the December quarter.  Results from listed retailers also confirm this trend with JBHifi reporting sales growth of +18.9% in New Zealand versus -2.3% in Australian.  New Zealand retailers have also reported good rises in sales in the last quarter of 2012 with Briscoe’s in particular recording fourth quarter sales growth of 9.1%.

One reason for the strength in New Zealand has likely been the Rugby World Cup although measuring the actual impact of this is difficult.  Weakness in Australia has been due to a number of factors including higher interest rates, political uncertainty, negative news headlines and a high Australian dollar leading to increased overseas spending.  The stronger relative performance in New Zealand has contributed to a 2.5% rise in the value of the New Zealand dollar versus the Australian so far in 2012.  We look forward to watching future economic data to see if we continue to maintain momentum over our Aussie counterparts or whether it has just been a one off boost from the Rugby World Cup.

Jonathan Windust