Hong Kong: Retail sales continue to freefall in November
January 3, 2020
Retail sales by volume plummeted 25.4% year-on-year in November, slightly less steep than October’s revised 26.4% plummet (previously reported: -26.2% year-on-year). Ongoing civil unrest, which has sent tourist arrivals plunging remains the key factor behind dismal retail sales in recent months.
In November, tourist arrivals dropped 55.9% year-on-year, after nosediving 43.7% year-on-year in October. Moreover, the fall in visitors from mainland China was more pronounced in November compared to October due to ongoing political tensions between the two territories.
The slightly weaker deterioration in sales volume was mainly driven by a less pronounced fall in clothing and footwear, and food, alcoholic drinks and tobacco, while fuel purchases increased at a faster pace in November. That being said, durable goods and purchases at department stores fell at a quicker pace in November.
On a seasonally-adjusted, three-month moving average basis, retail sales by volume in the September–November period dipped 11.2% from the preceding three-month period, softer than the 18.5% decline in August–October. Overall, the annual average variation in retail sales volume fell 10.8% in November after falling 8.5% in October.
Looking ahead, protests and heightened political uncertainty are expected to keep the retail and tourism sectors in a sickly way, which will likely translate into tapering employment levels, further dragging on private consumption in turn.
Author: Steven Burke, Economist