Sector's 9.5% growth beats estimate; experts see trend continuing for 2013

Hong Kong's retail sales rose at a significantly faster rate in November last year, far exceeding economists' expectations, thanks largely to a broadly stable labor market and a surge in visitor arrivals.

Economists expect retail sales to maintain high-end single-digit growth for the whole of 2013.

Total retail sales value in November 2012 jumped by 9.5 percent to HK$36.5 billion compared with a year earlier - significantly faster than October's 3.9-percent gain - data from the Census and Statistics Department on Tuesday showed. Total retail sales volume grew by 8.1 percent in November on an annual basis after having gone up by 3.6 percent the previous month.

Market analysts had expected the city's retail sales value growth to rise by only a median 3.7 percent, according to Bloomberg.

In the first eleven months of 2012, total retail sales gained 9.9 percent in value and 7.1 percent in volume terms over the same period a year earlier.

The government attributed the increase to a broadly stable labor market and a surge in visitor arrivals in November.

"Looking ahead, the vibrant inbound tourism and still largely stable job and income conditions should remain supportive of the retail industry in the near term. Nonetheless, we need to stay alert to an unsteady external environment, which may affect the local economy and consumer sentiment," a government spokesman warned.

Tse Kwok-leung, head of economic and policy research at Bank of China (Hong Kong), told China Daily Hong Kong's retail sales value growth this year can still register high-end, single- digit growth.

"With stable labor employment and moderate economic growth, local retail sales growth prospects for 2013 can still register high-end, single-digit growth although it would be difficult to post double-digit growth in 2013 as Hong Kong did in the last few years," Tse noted.

"This is due to the slowing down in mainland tourist spending growth in Hong Kong under the individual visit scheme launched in 2003." Tse added.

A DBS (Hong Kong) research report said: "The subsequent recovery in the mainland economy will likely bring about improvement in visitor spending, particularly from a low base. Locals' spending should also improve on the back of a tight labor market as well as better consumer sentiment overall."

The government data showed that the miscellaneous consumer durable goods sales volume increased the most, by 40.5 percent. This was followed by sales of electrical goods and photographic equipment (+16.8 percent in volume); optical shops (+13.9 percent); jewelry, watches and clocks, and valuable gifts (+11.5 percent); Chinese drugs and herbs (+10.1 percent); medicines and cosmetics (+10.1 percent); commodities in department stores (+9.5 percent); wearing apparel (+6.9 percent); commodities in supermarkets (+6.5 percent); and footwear, allied products and other clothing accessories (+0.7 percent).

On the other hand, furniture and fixtures sales volumes decreased by 10.2 percent in November 2012 compared with a year earlier. This was followed by sales of motor vehicles and parts (-5.5 percent in volume); books, newspapers, stationery and gifts (-5 percent); fuels (-3.4 percent); and other consumer goods, not elsewhere classified (-0.4 percent).

oswald@chinadailyhk.com

(HK Edition 01/04/2013 page2)