Latest / Early Edition with Ryan Bridge / Jane Turner: ASB Senior Economist on retail spending contracting in Q2 as petrol prices surged

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Jane Turner: ASB Senior Economist on retail spending contracting in Q2 as petrol prices surged · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: We got que two retail numbers. They show their rum
• 0:03
  Speaker 1: war starting to hit the hip pockets. Spending fell half
• 0:05
  Speaker 1: a percent follows a year and a half of solid
• 0:07
  Speaker 1: improvement in the retail sales. Jane Turner, asb senior economist,
• 0:11
  Speaker 1: joins me this morning. Jane, good morning, good morning. So
• 0:15
  Speaker 1: what did you make of that, I mean you sort
• 0:17
  Speaker 1: of expected.
• 0:19
  Speaker 2: Yeah, the figures were largely as we had expected. I
• 0:24
  Speaker 2: was in the detail. There is a little bit of
• 0:26
  Speaker 2: a mixed bag. But you know, those massive swings that
• 0:29
  Speaker 2: we saw on fuel prices and then the contraction and
• 0:33
  Speaker 2: spending on your volumes really drove those headline results. The
• 0:39
  Speaker 2: higher fuel prices ate out more of household budgets and
• 0:42
  Speaker 2: so we saw this pullback and discretory spending. So that
• 0:46
  Speaker 2: was expected. There were a few pockets of strengths. I
• 0:50
  Speaker 2: described these areas as being related to the housing market,
• 0:53
  Speaker 2: and that really reflects the strength and the housing market
• 0:56
  Speaker 2: we saw earlier in the year. So we don't expect
• 0:59
  Speaker 2: back to continue going.
• 1:00
  Speaker 1: Yeah, electronics did well.
• 1:03
  Speaker 2: Yes, we have seen quite a surge in electronics, but
• 1:06
  Speaker 2: then electronics has been performing really well for the past
• 1:10
  Speaker 2: at least five six quarters and we've seen quite similar surges,
• 1:13
  Speaker 2: so we're not one hundred percent of of what exactly
• 1:15
  Speaker 2: by high net. Potentially there was a little bit of
• 1:18
  Speaker 2: upgrade in TV World Cup, but it's really hard to
• 1:21
  Speaker 2: say without further information. But yeah, we did see really
• 1:25
  Speaker 2: strong housing market during spring and summer, and so I
• 1:28
  Speaker 2: think that's just more of the lagged effect of the
• 1:30
  Speaker 2: strong housing market because we also saw quite strong growth
• 1:34
  Speaker 2: and furniture and hardware. The house sales have since declined
• 1:38
  Speaker 2: quite sharply, so we expect to see a bit of
• 1:41
  Speaker 2: a pullback in Q three in these.
• 1:42
  Speaker 1: Areas, Jane, if you look at per capita sales, we're
• 1:45
  Speaker 1: still up on last year, aren't we? This is quarter
• 1:47
  Speaker 1: to quarter. Are we still on track for the recovery?
• 1:50
  Speaker 1: Or is that this is just sort of a blip
• 1:52
  Speaker 1: that the price of oil goes up, we pay more
• 1:54
  Speaker 1: on that, we spend a little bit less on other
• 1:56
  Speaker 1: nice things.
• 1:58
  Speaker 2: I mean, there is a bit of hope that there's
• 2:00
  Speaker 2: a bit of a blit. If we look at more
• 2:02
  Speaker 2: forward indicators such as consumer confidence, we have seen some
• 2:06
  Speaker 2: recovery come through there, but there are still quite a
• 2:09
  Speaker 2: few headwinds facing the household sector. Fuel prices, they have
• 2:14
  Speaker 2: fallen a lot off their peaks, but they are they're
• 2:16
  Speaker 2: still a little bit elevated cost of living pressures. They're
• 2:19
  Speaker 2: continuing there and now now we're seeing rising mortgage rates.
• 2:23
  Speaker 2: Adding to that, there's the week housing market, and we're
• 2:27
  Speaker 2: seeing a bit of a delay to the recovery and
• 2:29
  Speaker 2: the labor market. So we expect that generally consumer spending
• 2:34
  Speaker 2: will remain fairly modest throughout the rest of this year
• 2:37
  Speaker 2: before we see him more meaningful recovery probably next year.
• 2:40
  Speaker 1: Now, Jane Good TV on the program this morning, thanks
• 2:43
  Speaker 1: so much for your time. That is from ASB talking
• 2:46
  Speaker 1: about the retail sales numbers.
• 2:49
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• 2:52
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• 2:55
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