Hong Kong’s Nov retail sales post slowest growth in 17 months

Retail sales in November rose 1.4 percent from a year earlier in value terms to HK$39.2 billion ($5 billion), marking the 21st month of expansion. That compares with a revised 6 percent rise in October and is the slowest growth since June 2017.In volume terms, retail sales grew 1.2 percent in November, compared with a revised 5.3 percent rise in October. It is also the slowest since June 2017.

Growth in retail sales decelerated in November despite an increase in visitor arrivals, reflecting more cautious spending, a government spokesman said.“Consumer sentiment could be affected by weaker asset prices and the external uncertainties,” the spokesman said, adding that strong inbound tourism, favourable domestic job and income conditions would continue to support the retail sector.For the first 11 months of 2018, total retail sales rose 9.7 percent in value and 8.4 percent in volume from the same period a year earlier.Analysts say Hong Kong’s retailers have started to feel the chill from China’s slowdown, with the U.S.-Sino trade war and yuan depreciation taking a toll on the Chinese economy.Hong Kong’s economy is closely linked to China’s, with the city being a gateway to the mainland and benefitting from a steady flow of tourists and capital.The Hong Kong Retail Management Association said it expects to see flat growth in the fourth quarter, high single-digit growth for 2018 and low single-digit growth for 2019.However, two major infrastructure projects linking China and Hong Kong, a high speed railway and a giant sea-bridge to Zhuhai and Macau, are expected to boost visitor numbers and benefit the retail sector in the long run, some analysts say.November tourist arrivals rose 20.6 percent from a year earlier to 5.995 million, the biggest growth since February, according to the Hong Kong Tourism Board. Mainland visitors grew 25.8 percent, accounting for 77.2 percent of the total.Sales of jewellery, watches, clocks and valuable gifts decreased 3.9 percent in November, government data showed, the first drop since June 2017.Medicines and cosmetics rose 10.1 percent from a revised 15.2 percent rise in October, while department store sales were up 3.9 percent against a 3.5 percent rise in October.

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