Hong Kong: Retail sales growth falls to a six-month low in July
August 30, 2018
Retail sales volumes expanded 5.9% in annual terms in July, decelerating from June’s 9.8% increase and marking the weakest reading since February.
The slowdown mainly reflected declining sales for food, alcoholic drinks and tobacco as well as for supermarket sales. Despite remaining robust, sales of luxury items decelerated notably in July. On the flip side, sales of fuels accelerated in July largely due to higher oil prices, while sales of consumer durable goods also gained steam.
On a seasonally-adjusted, three-month-moving-average basis, retail sales in the May–July period decreased 1.4% from the preceding three-month period ending in April. The print followed the 0.1% decrease in the three-month period ending in June and represented the largest decline since December 2016. Meanwhile, annual average variation in retail sales volumes inched up to an over four-year high of 8.3% in July from 8.2% in June.
Looking forward, a government spokesperson noted that:
“favourable labour market conditions and sustained expansion in inbound tourism should continue to support retail sales performance in the near term. However, consumer sentiment may turn less sanguine going forward if the external uncertainties persist or escalate further. The Government will closely monitor the situation.”
Hong Kong Retail Sales Forecast
FocusEconomics Consensus Forecast panelists expect retail sales to increase 6.9% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, the panel sees retail sales growing 2.2%.