Y2k Sales boost for Canterbury NZ

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Millennium bug sales add to Canty growth

Stocking up to beat the millennium bug appears to have given December retail sales a boost, with sales growth in Canterbury particularly strong.

Statistics New Zealand said yesterday sales nationally in the December quarter rose 6.8 per cent over the same quarter in 1998 and were up 1.5% in seasonally adjusted terms over the September quarter. It was the sixth consecutive quarterly increase.

In the month of December itself national sales were up a seasonally adjusted 1.1% on November while actual sales were up 8.3% on December 1998.

In Canterbury actual sales were up almost 12% on December 1998 and actual sales for the quarter were 9.3% ahead of the year before.

The Bank of New Zealand's economic monitoring unit said hoarding against potential Y2K bug problems probably boosted sales.

Higher petrol prices would have contributed to the 2% rise in the motor-vehicle servicing sector, it said, but even without that volatile component, sales in December were up by 0.8%, showing spending had continued to grow at a "fairly strong" pace.

"The downside to all this buoyant activity is that strong inflation pressures appear to be building," the BNZ said.

It said the figures vindicated the Reserve Bank's 25 basis point rise in official rates on January 19 and another 50 basis point rise would be called for in March.

The BNZ unit said retail demand should remain firm but it did not expect spending to go much above the current 6.5% to 7% annual pace.

Statistics NZ said despite the steady pattern of growth there were conflicting factors which made the future picture difficult to assess.

"High levels of consumer confidence, increasing full and part-time employment, and recent strong residential building activity are positive influences on the level of retail spending," its report said.

"In contrast, higher interest rates and anecdotal evidence of price pressure are also emerging, with high import volumes indicating competitiveness in supply."

WestpacTrust economist Donna Purdue had expected an adjusted 1.3% increase for the December quarter over the September quarter, but thought the impact would be only marginal on up-coming GDP figures.

WestpacTrust, too, was expecting another 50 basis point rise at the RB's next Monetary Policy Statement, on March 15. "There are still some pricing pressures coming through," she said.

http://www.press.co.nz/2000/06/000210b11.htm

-- Martin Thompson (mthom1927@aol.com), February 10, 2000


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