According to recent government data released on Thursday, Hong Kong experienced its slowest retail sales growth in 17 months during November. This decline in growth is primarily attributed to consumers becoming more cautious due to uncertainties surrounding U.S.-China trade tensions and volatile financial markets.
In terms of value, retail sales for November only increased by 1.4 percent compared to the same month in the previous year, amounting to HK$39.2 billion ($5 billion). This marks the 21st consecutive month of growth, albeit at a significantly slower rate than the 6 percent rise seen in October. Volume-wise, retail sales grew by 1.2 percent in November, the slowest growth rate since June 2017.
The cooling of retail sales growth comes despite an increase in visitor arrivals, indicating a shift towards more conservative consumer spending. A government spokesperson highlighted factors such as weaker asset prices and external uncertainties affecting consumer sentiment. However, with continued inbound tourism and favorable job and income conditions domestically, the retail sector is expected to persevere.
For the first 11 months of 2018, total retail sales in Hong Kong saw a 9.7 percent increase in value and an 8.4 percent increase in volume compared to the same period the previous year. Analysts point to China’s economic slowdown and ongoing U.S.-China trade tensions as contributing factors to the slowing retail sales growth.
The Retail Management Association in Hong Kong predicts a flat growth rate in the fourth quarter of 2018, high single-digit growth for the entire year, and low single-digit growth for 2019. Despite these challenges, analysts remain hopeful about the sector’s long-term potential, specifically citing two major infrastructure projects connecting China with Hong Kong as potential growth drivers.
While retail sales growth in Hong Kong has decelerated, positive signs such as a significant increase in tourist arrivals and ongoing infrastructure developments are seen as factors that could potentially propel the sector forward in the long term.
To read more about Hong Kong’s retail sector, check out this article: Hong Kong’s November Retail Sales Slow to 17-Month Growth.
For more insights on the impact of U.S.-China trade tensions on global markets, visit this informative article: The Impact of U.S.-China Trade Tensions on Global Markets.
