Hong Kong: Retail sales contract for third consecutive month in April
May 31, 2019
Retail sales by volume fell 5.0% year-on-year in April, worsening from the 0.8% contraction logged in March. The print was driven by a broad-based contraction across all outlet categories, including a sharp contraction in sales of consumer durable goods and luxury goods.
On a seasonally-adjusted, three-month-moving-average basis, retail sales volume in the February–April period rose 0.9% from the preceding three-month period ending in January, up from the 0.2% increase recorded in the January–March period. Overall, the annual average variation in retail sales volume fell 4.1% in the 12 months up to March to just 2.8% in the period ending in April. Looking ahead, the softening in private spending observed in the first quarter should persist in Q2 due to the ongoing U.S.- China trade spat , and a sustained slowdown in the mainland.
Commenting on the outlook, a government spokesperson noted that “the larger year-on-year decrease recorded in April reflected the still-cautious consumption sentiment amid external uncertainties, but was also partly due to the late arrival of the Labour Day holidays in the Mainland (which fell in early May this year but straddled between April and May last year), which has led to a notable deceleration in the growth rate of visitor arrivals. […] In the near term, consumption sentiment will continue to be affected by various external uncertainties, though the sustained expansion in inbound tourism and the largely stable local labour market should provide support to retail sales business”.
Author: Joffrey Simonet, Economist