Retail sales slow 1.4% to $39.2b in November

Buying sentiment has soured in response to economic uncertainties.

Retail sales in Hong Kong once again decelerated to a modest 1.4% expansion or $39.2b in November following a sudden growth spurt in the previous month, according to the Census & Statistics department. 

“The generally moderated growth in retail sales in recent months reflected more cautious consumption sentiment in the face of various external uncertainties such as the US-Mainland trade tensions and volatilities in the global financial markets,” a government spokesperson said in a statement.

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The latest reading marks the fifth consecutive month of single-digit expansion after a heated double-digit growth rally in retail sales brought about by a revival in inbound tourism which can be traced back to February,

The sales value of medicines and cosmetics booked the largest growth in November at 10.1% followed by the sales of motor vehicles and parts (7.0%). The sales of books, newspapers, stationery and gifts; optical shops; fuels; and furniture and fixtures rose by 6.2%, 5.4%, 2.8% and 3.1% respectively. 

On the other hand, the sales value of jewellery, watches, clocks and valuable gifts fell by 3.9% along with electrical goods an other consumer durable goods which dipped 4.9%. The sales of Chinese drugs and herbs as well as commodities in supermarkets also fell by 0.4% and 0.1% respectively.

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“[W]hilst the favourable local job and income conditions and continued expansion in inbound tourism should still provide some support to the retail sector in the near term, consumer sentiment could be affected by weaker asset prices and the external uncertainties,” the spokesperson added.

The local stock market entered bear territory in September 2018 in response to escalating trade dispute, dampening Hong Kong’s private consumption growth.

“The performance of the Hang Seng Index has a strong positive correlation of approximately 0.6 with Hong Kong’s private consumption growth over the past three decades,” Fitch Solutions said in an earlier report. "The trend on Hong Kong stocks remains bearish, and in our view, this poses downside risks to consumption growth over the coming quarters.”