Hong Kong: Retail sales healthy in January despite timing of Lunar New Year holiday
March 2, 2018
Retail sales volumes grew 2.2% in annual terms in January, softening from the 4.3% rise recorded in December. Favorable employment and income dynamics, along with the ongoing improvement in inbound tourism, were behind January’s reading. It should be noted that major year-on-year fluctuations across outlet types in January were due to the timing of the Lunar New Year holiday—which fell in mid-February this year but in late January last year.
January’s performance was mixed across outlet types, with a significant jump in annual sales of consumer durable goods partially offset by steep declines in food, alcohol and tobacco sales, as well as sharply lower supermarket sales. Notably, sales growth of luxury items—typically tied to holiday spending and inbound tourism from mainland China—ticked up in the month. On the other hand, department stores recorded lower volumes as holiday sales this year were pushed into February.
On a seasonally-adjusted, three-month moving average basis, retail sales ending in January rose 2.5% from the preceding three-month period ending in October. January’s reading marked an acceleration from the 2.0% increase seen in the three-month period ending in December. Notably, annual average variation in retail sales volumes hit a 43-month high, increasing from December’s 1.9% to 2.3%.
A government spokesperson noted that:
“[January’s result] suggests that consumer sentiment has been rather robust on entering 2018. Nevertheless, it would be more useful to analyze the retail sales figures for January and February combined, when available, to show more clearly the underlying growth trend. Looking ahead, the favorable job and income conditions and sustained recovery in inbound tourism should continue to render solid support to retail business in the near term.”
Author: Christopher Thomas, Economist