Singaporean retail sales rebound sequentially in July, jobless rate remains at 2.2 pct

Singaporean retail sales recovered in July, growing 2.6 percent sequentially, after shrinking in the prior two months. However, retail sales continued to shrink on a year-on-year basis, contracting 1.8 percent, as compared with the contraction of 8.9 percent recorded in June. Online sales also comprised of 5.6 percent of total retail sales in July.

Motor vehicle sales rose sharply 23.7 percent sequentially, while other segments that also saw positive on-month growth were furniture & household equipment and computer & telecommunications equipment. Nevertheless, retail sales excluding autos dropped again for the sixth consecutive month by 2.4 percent year-on-year.

On a year-on-year basis, most retail segments continue to underperform, with the exception of medical goods & toiletries and supermarket & hypermarkets. Leading the fall in year-on-year retail sales were discretionary items like furniture & household equipment, computer & telecommunication equipment, watches & jewellery and recreational goods.

“Looking ahead, we continue to anticipate a gradual erosion in consumer confidence and tightening of belts by households”, said Selena Ling, Head of Treasury Research & Strategy, OCBC Bank.

Meanwhile, the domestic labor market continued to weaken, although at a gradual rate in the second quarter of 2019. While total employment excluding foreign domestic workers continued to expand by 6,200 in the second quarter of 2019, the figure of retrenchments continued to be low at 2,320 and the overall jobless rate stayed at 2.2 percent.

The number of job vacancies dropped for the second quarter to 47,700 in June and the seasonally-adjusted ratio of job vacancies to unemployed persons slipped.

“With overall GDP growth expected near the midpoint of the 0-1% yoy range for 2019, and market speculation of potential policy easing, whether on the monetary front at the October MAS meeting or fiscal stimulus at the 2020 Budget, being potentially anticipated, any fallout in the domestic labour market should be somewhat limited in the near-term. In fact, MOM expects that job opportunities in the community, social and personal services, professional services, financial and insurance services, and information and communications sectors will continue to provide support to the labour market”, added Selena Ling.