15 Aug 2012

Households wary despite apparent rebound

7:07 am on 15 August 2012

Retail spending may have rebounded, but at least one economist says households remain prudent in their spending habits amid a subdued economic recovery.

Official figures show retail spending rose 1.1% in the three months to June compared to the previous quarter, when it contacted 0.6%.

Excluding price changes, volumes rose 1.3%, with higher car sales offsetting fuel sales. The high exchange rates for the New Zealand dollar boosted sales of imported electronic goods.

Stripping out volatile car and fuel sales, core retail volumes rose 0.9%.

On an annual basis, retail spending rose 4.8%.

UBS senior economist Robin Clements says while people appear keen to keep down debt, they're still spending at modest levels.

"The data ... suggest that consumers are a little bit more willing with their wallets than we thought," he says.

"It's a solid contribution to the recovery and ongoing growth, but its not going to be the driver of recovery."

On an annual basis, retail spending rose 4.8%.

Statistics New Zealand says the trend for retail spending has eased back this year, after strong growth last year.