Hong Kong: Retail sales decrease less dramatically in December
February 3, 2017
The drop in retail sales in Hong Kong lessened to 2.9% year-on-year in December, recovering somewhat from the sharp decline in November (-5.4% yoy). This marked a return to the milder decreases recorded in September and October and gives retailers some hope of a moderate improvement in the retail sector. Retailers have seen 17 consecutive months of declines in sales amid dwindling volumes of tourist arrivals and a strengthening U.S. dollar—to which the Hong Kong dollar is pegged. A government spokesman indicated that the narrower decline in December partly reflected a recent influx in tourist arrivals and a stable labor market. According to disaggregated data, sales of consumer durable goods, along with electrical goods and motor vehicles, suffered the most in December.
December’s reading, together with the similarly mild decline in October, boosted seasonally-adjusted volumes of retail sales in the three-month period ending in December, which increased 2.3% over the previous period. This result was notably below the 4.7% increase seen in the three-month period ending in November.
A government spokesman noted that the performance of retail sales “will still depend on whether the recent improvement in inbound tourism could gain more traction and the extent to which local consumer sentiment would be affected by various external uncertainties.”
Author: Christopher Thomas, Economist