Hong Kong: Retail sales growth notches 33-month high in November on upbeat consumer sentiment
January 3, 2018
Retail sales volumes grew 6.9% in annual terms in November, accelerating from October’s 3.9% expansion. November’s uptick represented the seventh consecutive month of growth and a 33-month high, confirming last year’s sustained turnaround in the retail sector following a nearly two-year slump. Robust employment dynamics, which has buoyed consumer sentiment, and the ongoing recovery in inbound tourism were behind November’s strong reading.
November’s performance was mixed across outlet types, with outlets of consumer durable goods and other consumer goods recording double-digit annual growth in the month. Meanwhile, non-supermarket food and alcohol outlets and department stores recorded weaker sales growth from a month earlier. Moreover, sales growth at luxury item outlets—whose sales are typically tied to inbound tourism from mainland China—ticked down from October despite the influx of visitors. At fuel outlets, sales fell from the same month a year earlier.
The three-month moving average of seasonally-adjusted volumes of retail sales ending in November jumped to 4.7% from the preceding three-month period. This result followed the 2.3% increase seen in the three-month period ending in October. Notably, annual average variation in retail sales volumes hit a 38-month high, increasing from October’s 0.2% to 1.2%. Given the recent trajectory of retail sales, it appears increasingly likely that annual average growth will edge even higher by year’s end.
A government spokesperson noted that:
“Retail sales accelerated to show appreciable year-on-year growth in November, reflecting the visible growth in visitor arrivals and the sanguine consumer sentiment during the period. The near-term outlook for retail sales remains positive, as consumer sentiment is buttressed by the favorable employment and income situation, and as inbound tourism continues to recover.”
Author: Christopher Thomas, Economist