
Chart of the Day: Here's what dragged retail down in 3Q12
Thankfully, December data bodes well.
According to DBS, retail sales figures for December 2012 are out this week. Values and volumes are projected to grow 7.5% and 6.6% respectively, concluding the year with 9.6% and 7.1% growth respectively.
3Q’s performance was what really dragged down the numbers. In 3Q12, China’s slowdown dampened tourists’ retail spending growth (using a proxy derived from popular tourist items) to just 2.2% versus 42.2% for the full year of 2011.
Here's more from DBS:
Thankfully, much of the uncertainty on China’s economic recovery has cleared. The present recovery in the Chinese economy will likely bring about improvement in visitor spending, particularly from a low base.
Locals’ spending should also improve on the back of a tight labor market (December’s seasonally-adjusted unemployment rate retreated to 3.3%), as well as better consumer sentiment overall.
Further, the chart on the right shows that retail sales growth tracked well with residential property prices. Retail sales are apparently recovering. Private consumption and headline GDP will soon follow.