Jobs, tourism power 13th consecutive month of growth

Hong Kong's retail sales climbed for the 13th straight month in September, thanks to an improving job market and the continued robust growth of inbound tourism, the government said Monday.

Eliminating inflationary effects over the same period, the value of total retail sales jumped 17.2 percent to HK$25.1 billion compared with the same period a year ago, according to the Census and Statistics Department. Meanwhile, retail sales by volume rose 15.8 percent year-on-year.

The entire year so far has painted a bright picture of the city's retail business. Retail sales increased 17.9 percent by value and 15 percent by volume for the first nine months compared with the corresponding period in 2009.

Strong consumer sentiment underpinned by an improving job market, together with continued growth in inbound tourism, has helped the retail business, a government spokesman said after the release of the September figures.

The spokesman expected retail sales to remain robust going forward, "supported by better labor market conditions and vibrant inbound tourism".

Jobless rate remained unchanged at 4.2 percent for the July-September period compared with the June-August period, the lowest level since December 2008. Total employment rose 8,000 to 3,520,600 for the three months ended September from that of the preceding three months, the highest level since November 2008, showing that there is a sustained demand for labor as the economy continues to recover.

Meanwhile, inbound tourism, which accounts for almost 30 percent of the retail business, played its part in driving up retail sales, according to Irina Fan, senior economist at Hang Seng Bank.

Around 2.7 million tourists visited the city in September, up 21.2 percent from a year earlier. Despite the summer holidays being almost over, growth in inbound tourism has continued, revealing that mainland visitors not only travel to the city during the peak travel seasons and festive holidays. They also come frequently for weekend shopping trips, thanks to the introduction of the Individual Visit Scheme in 2003, which allows mainlanders to visit the city without joining a tour group, said the Hong Kong Tourism Board in a statement accompanying the September figures.

For the months ahead, Fan forecast "solid growth" in retail sales, which may translate into a 14 or 15 percent rise.

Among several factors that are likely to shore up retail sales, there is also the "wealth effect", which is likely to come on the heels of the second phase of quantitative easing to be introduced in the US shortly. The low interest rate environment, Fan said, will see huge fund inflows into Asia's stock and property markets, boosting the city's wealth and people's willingness to spend.

China Daily

(HK Edition 11/02/2010 page3)