Hong Kong retail sales down for first half of year but figures ‘better than expected’ after stormy weather
Weaker tourism in June may have contributed to lower sales figures for month
Retail sales in Hong Kong fell 0.6 per cent in the first half of the year compared with the same period last year, adding uncertainty to the city’s fragile economic progress.
For the month of June, sales were relatively flat, up just 0.1 per cent, according to the Census and Statistics Department.
As a small consolation, the modest increase marked the fourth straight month of growth for the retail sector.
Retail Management Association chairman Thomson Cheng Wai-hung said the sales figures were stable overall and had expected worse numbers due to the stormy and rainy weather.
“Because there was a lot of rain in June, we were quite nervous about the results. But it was better than what we predicted,” Cheng said.
However, the figures put a cloud over Financial Secretary Paul Chan Mo-Po’s announcement on July 22 that the government might upgrade the city’s growth forecast from 2 to 3 per cent if economic conditions further improved.
A government spokesman said favourable employment and income conditions should keep local consumer sentiment buoyant. But he added that in the near term retail sales would depend on “the pace of recovery in inbound tourism” and economic improvement.
June’s nominal uptick in sales suggested that weaker tourism could have contributed to the lower retail figures for the month.
According to the Hong Kong Tourism Board, there were 1.9 per cent fewer visitors to the city compared with a year ago.
Arrivals from the mainland declined 3.4 per cent year on year. Mainland travellers are a major source of retail sales for the city.
Cheng again put the blame for the tourism decline on the bad weather in June.
Motor vehicle and parts retailers were the biggest winners, registering a 7.3 per cent increase in sales year on year.
However, those selling electronic goods and photographic equipment suffered, as they saw a decline of 8.1 per cent.
This marked 21 consecutive months of negative growth for the sector, but it was the smallest decline in 20 months.
Cheng said that this showed the sector was on a “good trend”.
In the last three years, retail sales have ended in the red. Looking ahead, Cheng expected the retail sector to end the year in positive territory. He said the second half of the year has more festival and events which he expects is when consumers spend more on retail goods.
“Most of our members have an optimistic view on the figures in the next few months, as we all think the atmosphere for [spending] will be better,” Cheng said.