Media statement
Wednesday, November 12th, 2003
Retail sales grow without inflation
The 2.3 per cent lift in retail sales for the September quarter released today was achieved without inflation, the
Employers & Manufacturers Association (Northern) says.
EMA said the Reserve Bank should hold off making a decision over interest rates at least until after the world rugby cup
final. A win, or a loss, will impact significantly on consumer confidence.
The next interest rate announcement is due on December 4th.
"It's good to see the domestic economy in fine shape with retail sales rising strongly without inflation," said EMA's
chief executive Alasdair Thompson.
"Retail and export sales growth provide the signals producers rely on to know if they should keep expanding the supply
of goods and services and employing people.
"It would be a shame if the growth was stalled by a precipitous rise in the OCR on December 4th.
"A lift in interest rates wouldn't reduce the demand for housing which the Reserve Bank is targeting, but it could stall
the growth. Housing demand is being driven by population increases and supply is rapidly catching up.
"Sales of imported goods have been going up as they have been getting cheaper as the US dollar weakens.
"Exporters would suffer from a rise in interest rates, and they're struggling with export sales down 9.6 per cent for
the year ended September, including a 6.4 per cent drop in exports of the skills and employment-rich elaborately
transformed manufactured goods."
ENDS