Hong Kong’s retail sales drop again in August, near-term outlook hinges on inbound tourism, consumer sentiment

Hong Kong’s retail sales fell for the 18th consecutive month in August. The provisional value of the country’s total retail sales dropped 10.5 percent year-on-year to SGD 33.9 billion, according to Hong Kong’s Census and Statistics Department. The revised estimate of July’s value of retail sales dropped 7.7 percent year-on-year. For the January to August period, Hong Kong’s value of total retail sales fell 10.2 percent year-on-year.

After netting out the effect of price changes in the same period, the provisional estimate of the volume of total retail sales fell 12.7 percent year-on-year in August. July’s estimate was revised to a decrease of 8.4 percent year-on-year. For the January to August period, the provision estimate of the volume of total retail sales fell 10.2 percent year-on-year.

The value of sales of watches, jewellery, clocks and valuable gifts dropped 26.6 percent year-on-year in the month. Meanwhile value of sales of alcoholic drinks, food, and tobacco rose 8.8 percent in August 2016, followed by sales of other consumer goods that rose 2.8 percent.

On a seasonally adjusted basis, the provisional estimate of the value of total retail sales fell 1.4 percent in the three months ending August as compared with the prior three-month period. The volume of retail sales during the period fell 2.2 percent.

According to a government spokesman, the retail sales weak performance continued in August, reflecting the drag from the drop in visitor arrivals in August and the cautious consumer sentiment in the midst of an uncertain economic outlook.

The government spokesman stated that the near-term outlook for retail sales would continue to depend on the performance of inbound tourism and the degree to which local consumer confidence would be impacted by several external headwinds.