Slow Trading Continues For Retailers
Stats NZ's Electronic Card Transactions for June shows an increase in 'total retail' spending of just 0.5% compared to May (seasonally adjusted monthly values).
However, when compared with June 2024 – which is how retailers monitor their sales performance – sales are down 0.4%.
'While it's positive to see the improvement in sales compared to May, the year-on-year data tells a different story,' Ms Young says.
Initial results from Retail NZ's quarterly Retail Radar survey of retailers shows that about 60% of respondents report they did not meet their sales targets for the April-June quarter. The full survey results will be released next week.
'The retail sector is continuing to battle strong headwinds, with low consumer confidence limiting sales. Consumers are continuing to be careful with their spending and we have yet to see the boost expected from lower interest rates,' Ms Young says.
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Otago Daily Times
5 days ago
- Otago Daily Times
Real-time info likely the best info
Real-time data can lead to better decisions, Dennis Wesselbaum writes. In late July, New Zealand was — slowly — receiving economic data from the June quarter. Inflation had hit a 12-month high, for example, confirming what many already suspected. But the country was still nearly two months away from getting figures on economic activity – namely, gross domestic product (GDP). Official statistics such as GDP and inflation have long been delayed, offering a picture of how the economy was, rather than how it is. Stats NZ, for instance, released GDP data for the December 2024 quarter in March 2025, a lag of around three months. As a result, economic decisions and public debate are often based on out-of-date information. One example from last year illustrates how such delays can distort policy. In August 2024, the Reserve Bank of New Zealand cut interest rates a year earlier than markets had expected, despite considering further hikes just months before. With no monthly inflation or GDP data, the Reserve Bank had to rely on private-sector indicators while waiting for official figures, which later confirmed that inflation was indeed easing. This is where "nowcasts" prove useful. Launched in April, the Reserve Bank's "nowcasting" tool — Kiwi-GDP — publishes weekly estimates of economic activity. Using advanced statistical models to estimate current GDP growth, it aims to bridge the gap between real-time developments and the lagging arrival of official statistics. As of mid-July 2025, Kiwi-GDP suggests there may be a decline in economic activity. The model estimated negative GDP growth, figures from July 18 indicating a decline of 0.29%. This marks a sharp reversal from earlier estimates of around 0.8%, and even from late June, when the model still pointed to modest positive growth. The downward revision appears to be driven primarily by weakness in retail and consumption data, as well as survey-based indicators. These early signals suggest that economic momentum may be fading, even before the release of official GDP data for the June quarter. While the tool offers insight, it is not without pitfalls. Politicians and economists must be cautious in interpreting its weekly updates. Tools such as Kiwi-GDP allow policymakers and analysts to synthesise multiple data sources and form an informed view of current conditions. But not all indicators are equal. Some are timely; others are noisy or unreliable. A good "nowcast" weighs data based on its quality and predictive value. The shift in outlook for the New Zealand economy illustrates both the strength and the limitation of these tools: it reacts quickly to new information, but is also prone to significant revision. This volatility poses challenges for policymakers. When monetary policy decisions were made in May, the prevailing "nowcast" pointed to 0.5% growth for the June quarter. If that projection influenced decision-making, the resulting policy would be misaligned with economic reality. Although "nowcasting" improves real-time analysis, its very responsiveness exposes central banks to risk. There are other New Zealand specific concerns. Kiwi-GDP relies on a single model, which comes with inherent limitations. Even in stable conditions, the actual economic process is likely more complex than any model — however flexible — can capture. As the economy evolves, the best models shift with it. These shifts are difficult to detect from past performance alone. Relying on one model increases the risk of blind spots and instability. A better approach would combine forecasts from multiple models. This reduces the impact of individual assumptions and helps smooth out measurement errors. Another drawback is that Kiwi-GDP produces point estimates — a single number for GDP growth — rather than a range of possible outcomes. This assumes the cost of forecast errors are equally likely to be positive or negative, when in fact they are not. Overestimating growth could lead to premature rate hikes and an unnecessary slowdown; underestimating it might result in overly loose policy and rising inflation. For policymakers, the consequences of being wrong vary depending on the direction of the error. To improve decision-making, Kiwi-GDP should make uncertainty more explicit. Presenting a range of outcomes or scenarios would help ensure that risks are properly accounted for. Without such transparency, there is a danger that decisions are made with a false sense of confidence. "Nowcasting" helps bridge the gap between decision-making deadlines and the delayed publication of official data. By leveraging real-time indicators, it offers a clearer picture of where the economy stands. Forecasting the future remains important – but understanding the present is just as crucial. Without an accurate sense of the current state of the economy, informed policy making becomes much harder. — ■ Dennis Wesselbaum is an associate professor, department of economics, University of Otago.
RNZ News
6 days ago
- RNZ News
Call for government to help Auckland as unemployment rises
File photo. Simon Bridges it was tough in Auckland and called for fiscal stimulus. Photo: RNZ / Samuel Rillstone Auckland's Business Chamber boss is calling on the government do more to stimulate the economy in the supercity, and the country, as jobless figures rise . The latest Stats NZ data shows Auckland's 6.1 percent unemployment rate for the June 2025 quarter is the worst of all regions. It is also above the national unemployment rate which rose to a near-five year high of 5.2 percent as businesses either sacked staff or stop hiring. "It's pretty grim ... it's very very tough in Auckland," Chamber chief executive Simon Bridges told Morning Report. There was a real case for serious policy or fiscal stimulus around New Zealand, and particularly in the big cities, in order to "get things going". "I think we need to raise the animal spirits, if you like, of the business community." Bridges said a boost in confidence in Auckland was needed at both business and consumer levels. Things were tough in the city which hadn't caught a break since before the Covid-19 pandemic started, he said. "There is more stimulus, there is more policy work that government could be doing to provide a better business environment in Auckland in the here and now," he said. "I think [the government has] done some worthy long term things, but in the end if all we worry about is the long term, I'm not sure there'll be that many Kiwis left in Auckland," he said. "It's now that they need to be focused on." Employers and Manufacturers Association (EMA) head of advocacy Alan McDonald said while the agriculture industry was bolstering employment elsewhere, Auckland had different economic drivers. "Numbers from the Auckland Council Economic Unit indicated unemployment would be quite high [in the June quarter] and it has been for some time. "There are some signs of recovery but they're being led by the regional economy and primary sector and Auckland is more about manufacturing and services. "Hospitality, tourism, education sectors have all been down as well." McDonald said EMA had received a spike in calls to its advice line about redundancies and restructures since March. "We had hoped 5.1 [in December 2024] might be the bottom of Auckland's unemployment numbers, but we've been hearing from March until now that things are still very tight and very tough." But things were starting to turn he said. The Stats NZ quarterly labour market figures released on Wednesday also showed unemployment was [ more than double the national rate at 12.1 percent. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Newsroom
6 days ago
- Newsroom
Charting who and where is worst hit by labour market slump
Aucklanders, along with those looking for casual and part-time work, are among those suffering in a soft labour market, latest data shows. Seasonally adjusted employment figures released by Stats NZ on Wednesday showed the national rate of unemployment ticked up 0.1 percentage points to 5.2 percent in the June 2025 quarter, marking an 11.1 percent rise in joblessness with 158,000 New Zealanders out of work. This is the highest rate since 2020 and in line with the Reserve Bank's expectations, but lower than the 5.3 percent widely forecast by economists.
