NZ: Strong economic data releases – Deutsche Bank

Analysts at Deutsche Bank notes that in New Zealand, retail sales surged 2.0%qoq in volume terms in Q2, well above market, though in part reflecting strong growth in spending on accommodation and liquor that would have been associated with the early part of the Lion’s rugby tour.

Key Quotes

“Still, growth was broad-based and the Q2 outcome follows an already strong (and upwardly-revised) 1.6% qoq lift in spending in Q1 so that the through-year rate of growth remained at a heady 5.5% yoy. Core spending (which excludes the automotive sector) rose 2.1% qoq/4.8% yoy. This print adds to our confidence that growth in Q2 GDP will rebound from the surprisingly soft reading in Q1. 'Soft' data released during the week reinforces this as well. The July prints for BusinessNZ's PMI and PSI slipped a little, but our composite activity index, based on these two indicators, continues to point to stronger GDP growth over coming quarters.”