Hong Kong: Retail sales growth accelerates in April, supported by a strong domestic labor market
May 31, 2018
Retail sales volumes grew a solid 11.1% annually in April, picking up steam from March’s revised 10.1% expansion (previously reported: +10.0% year-on-year). Retail sales were buttressed by strong domestic demand—itself largely supported by record-low unemployment— and a healthy tourism sector, which suggests consumer spending could conserve its strong momentum in the second quarter.
The uptick in April came on the back of stronger retail sales across most categories, with notable growth recorded in consumer durable goods, such as automobiles and washing machines, which returned to double-digit growth after a sharp moderation in March, and robust sales growth of luxury items—typically tied to holiday spending and inbound tourism from mainland China. Fuel sales rebounded in April, whereas sales of food, alcoholic beverages and tobacco grew modestly. Meanwhile, clothing and footwear and department store sales eased, and supermarket sales contracted.
On a seasonally-adjusted, three-month moving average basis, retail sales in the February–April period increased 5.4% from the preceding three-month period ending in January. The print was a deceleration form the revised 6.3% rise seen in the three-month period ending in March (previously reported: +6.2%). Meanwhile, annual average variation in retail sales volumes hit an over four-year high of 6.6% in April, following a print of 5.8% in March.
A government spokesperson noted that:
“Looking ahead, favourable job and income prospects and sustained growth in inbound tourism should continue to support retail sales in the near term.”
Author: Lindsey Ice, Economist