13 Oct 2009

Retail sales record biggest increase in two years

6:11 pm on 13 October 2009

Retail sales in August recorded their biggest monthly increase in almost two years.

Statistics New Zealand says sales rose 1.1% as two-thirds of all retailing groups posted rises.

Sales of clothing and softgoods and hardware led the way with increases of 6.5% and 7.2% respectively.

Automotive-related sales also rose 1.2% in August with all categories except car sales going up.

The increase in retail sales was double expectations by economists of a 0.5% rise.

Rises were recorded in all regions except for Wellington and Waikato.

Radio New Zealand's economics correspondent says the figures will add more weight to those predicting an early rise in interest rates by the Reserve Bank. It was lowered to 2.5% from 3% on 30 April.

Monthly sales growth has now averaged 0.3% since April compared to 0.1% in the previous 18 months. However, this is still below monthly increases of 0.4% since 1995.

The New Zealand dollar was buying as much as US73.95 cents mid-afternoon on Tuesday and was not far off its 15-month high against the Greenback.