Europe, Japan demand to offer steady buffer
Year-end holiday sales in the United States grew by a lacklustre 4 per cent, the slowest pace in five years, according to Trade Development Council estimates.
The poor Christmas result is down from the 4.6 per cent increase recorded last year and is evidence consumer confidence is unable to shake off the effects of falling interest rates and the credit crunch.
'In the US, economic activity is likely to take a breather amid lingering housing corrections and the accompanying subprime fallout. The long-running consumption binge, already losing some of its earlier steam, is expected to slacken further,' the council said.
'In Europe and Japan, sustained but slower economic growth should take hold next year, and a steady appetite from the EU and, to a lesser extent, from Japan will provide some buffer against the uninspiring demand from the US.'
For Hong Kong, HSBC economist George Leung Siu-kay said he expected retail sales growth to remain robust given rising household wealth from the active labour and stock markets as well as the influx of mainland tourists. However, slower economic growth in the US would continue to weigh on exports.
'We expect this robust demand from China to be sustained as household wealth strengthens and mainland living standards rise,' Mr Leung said. 'However, the anticipated slowdown in the US and therefore its demand for foreign products, which accounts for about 15 per cent of Hong Kong's exports, will bring some pressure to bear.'
Hong Kong's total exports last month rose 6.6 per cent to HK$244 billion from a year ago. This is down from October's 9.8 per cent increase.
Of the total in November, re-exports grew 6.9 per cent to HK$234 billion while domestic exports increased 0.8 per cent to HK$10 billion. Last month's imports jumped 9.3 per cent to HK$260 billion, also down from the 12.1 per cent growth recorded in October.
The trade deficit last month stood at HK$16 billion.
In the first 11 months of this year, exports rose 9.3 per cent year on year. Imports increased 10.3 per cent.