Income and Employment Optimism to Fuel Retail Sales Growth in New Zealand
New Zealand, 22 September 2004 – MasterCard today announced that New Zealand can expect growth in retail sales in the
second half of 2004
Released by MasterCard International, the MasterIndex of Retail forecast places New Zealand eighth out of 12
Asia/Pacific markets and predicts that retail sales in this country will continue to grow by 6.8% year-on-year, reaching
NZ$15.8 billion in value.
Although the recently released MasterIndex of Consumer Confidence showed that New Zealand consumers are less optimistic
than they were six months ago, with a score of 56.5, it also showed that they are highly optimistic about regular income
and employment - confidence that has buoyed the latest retail sales forecast.
Conducted twice a year in June and December, the MasterIndex of Retail was launched in June 2003 by MasterCard as part
of its knowledge leadership in Asia/Pacific. It is among MasterCard’s MasterIndex suite of research initiatives,
providing six-month forecasts of retail sales growth in 12 markets: Australia, China, Hong Kong, Indonesia, Japan,
Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand.
Year-on-year retail sales volumes are anticipated to grow for all 12 Asia/Pacific markets covered under the forecast for
the second half of 2004.
Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard International, commented, “The interest rate cycle has
started to move up since the Federal Reserve raised interest rates in June. We have seen how the uncertainty related to
the new interest rate environment has affected consumer outlook on the stock market in Asia/Pacific in our latest
MasterIndex of Consumer Confidence survey. From the point of view of consumer spending and retail sales, however, the
outlook is one of continuing strength in the region. Expectations of stronger income growth and better employment
conditions clearly have more than compensated for higher interest rate expectations. This bodes well for retailers and
the service sector generally.”
Combining 10 years of retail sales data , factoring in the secular trend of growth of the retail industry, GDP outlook,
and using the MasterIndex of Consumer Confidence as an independent variable , an estimate of retail sales value is
obtained for the same six-month horizon covered by the MasterIndex of Consumer Confidence.