Motor vehicle industry drives up New Zealand consumer spending

Spending on cars in the quarter to the end of December last year drove New Zealand's retail purchases to their highest rise in more than two years, the government statistics agency announced on Monday.

The volume of total retail trade sales rose 1.7 percent in the December quarter, after rising 1.6 percent in the September quarter, according to Statistics New Zealand.

That was the highest rise since the June 2012 quarter, when sales rose 1.9 percent.

"The motor vehicle industry drove this quarter's increase, having the largest rises in both the sales volume and value," acting business indicators manager Tehseen Islam said in a statement.

Twelve of the 15 retail industries had higher sales volumes, with the biggest rises in motor vehicle and parts retailing, which were up 3.4 percent, and food and beverage services, up 3 percent.

The biggest fall was in supermarket and grocery stores, which were down 1.2 percent.

The volume of sales in core retail, which excludes the vehicle- related industries, rose 1.5 percent.

The total value of retail sales rose by 1.6 percent, or 302 million NZ dollars (226.25 million U.S. dollars), the largest total value increase since the June 2012 quarter, when sales rose by 1.8 percent, or 306 million NZ dollars (229.35 million U.S. dollars).

The trends for both total retail sales volumes and values had generally been rising since mid-2009.

An Economic Update report from the ASB Bank said the figures showed New Zealand households were both confident and cautious.

Household spending confidence was being driven by the strong labor market, falling retail prices, falling interest rates and falling petrol prices, but retailers still had to discount to draw customers and retail margins were under pressure.

The ASB Bank forecast the Reserve Bank of New Zealand would hold its official cash rate at 3.5 percent "for the foreseeable future." Endi