Hong Kong: Retail sales gain traction In May
July 3, 2018
Retail sales volumes grew a solid 11.6% in annual terms in May, accelerating slightly from April’s revised 11.0% expansion (previously reported: +11.1% year-on-year). Retail sales in May were supported by robust domestic demand and strong tourism. Back-to-back double-digit growth in April and May likely fed through to stronger private consumption in the second quarter.
May’s increase came on the back of stronger retail sales across most categories, with notable growth registered in department store sales; luxury items—typically tied to holiday spending and inbound tourism from mainland China; and other consumer goods, such as books, medicines and cosmetics. Consumer durable goods sales, such as automobiles and washing machines, posted double-digit growth, but moderated slightly from April. Food, alcoholic beverages and tobacco; clothing and footwear; and fuel sales also gained momentum in May. Meanwhile, supermarket sales continued to contract, albeit at a softer pace.
On a seasonally-adjusted, three-month-moving-average basis, retail sales in the March–May period increased 2.6% from the preceding three-month period ending in February. The print was a deceleration from the revised 5.7% increase in the three-month period ending in April (previously reported: +5.4%). Meanwhile, annual average variation in retail sales volumes jumped to an over four-year high of 7.5% in May from 6.6% in April.
A government spokesperson noted that:
“Looking ahead, the near-term outlook for retail sales business should stay positive, given the robust labour market and sustained growth in inbound tourism.”
Author: Lindsey Ice, Economist