Singaporean retail sales fall more than expected in June, outlook remains soft in H2 2019

Singaporean retail sales dropped more than anticipated in June. On a year-on-year basis, retail sales dropped 8.9 percent, owing to the drag from auto sales again. Sequentially, retail sales fell 2.2 percent. Auto sales dropped 32.4 percent year-on-year basis in June. In the meantime, the May retail sales print was also downwardly revised to -2 percent from -2.1 percent.

Stripping autos, retail sales dropped 2.7 percent year-on-year but rose 0.4 percent sequentially, versus the revised 0.8 percent year-on-year contraction seen in May. Other segments of retail sales that underperformed included furniture & household equipment, computer & telecommunications equipment and watches & jewellery, in spite of the Great Singapore Sale. The only retail segments that saw positive on-year growth were medical goods & toiletries, wearing apparel & footwear, department stores and food retailers.

“We expect the second half retail sales outlook to remain soft since retail sales already fell 2.6 percent yoy in the first six months of 2019 (-1.8 percent excluding motor sales)”, said Selena Ling, Head of Treasury Research & Strategy, OCBC Bank.

The second half retail sales growth is expected to remain in negative territory and full-year 2019 to come in around 1.3 percent year-on-year.

“If this materialises, this would likely mark the second year of contraction for retail sales”, added Selena Ling.