Hong Kong’s retail sales in September grew at their slowest pace in 15 months, government data showed on Thursday, with outlook clouded by external headwinds including mounting trade friction between Beijing and Washington.
Retail sales in September rose 2.4 percent from a year earlier in value terms to HK$36.6 billion ($4.67 billion), marking their 19th month of expansion, but the slowest growth since June 2017. That compares with a revised 9.4 percent rise in August.
In terms of volume, retail sales grew 1.4 percent in September, compared with a revised 7.9 percent rise in August. This marked the slowest growth in retail sales since June last year. Retail sales grew at a slower pace, dented by lean tourism due to typhoon Mangkhut, while Sino-U.S. trade tensions also likely weighed, a government spokesman said.
“External uncertainties and weaker asset markets may increasingly affect consumer sentiment,” the spokesman said.
“Favourable labour market conditions and buoyant inbound tourism should continue to support the retail sector in the near term.”
For the first nine months of 2018, total retail sales rose 11.1 percent in value and 9.6 percent in volume.
The value of third-quarter retail sales in the city slipped 2.9 percent from the previous quarter, while volume was down 3 percent. China’s economy grew less than expected at 6.5 percent in the third quarter from a year earlier, marking its weakest expansion since the global financial crisis amid a trade war with the United States.
China’s retail sales rose 9.2 percent in September from a year earlier. The country is planning more tax cuts to help spur domestic consumption and take more timely steps to support its economy, which faces increasing pressures.
Analysts are optimistic that tourist arrivals in Hong Kong from mainland China will remain strong over the long-term as the Guangzhou-Shenzhen-Hong Kong high-speed railway and Hong Kong-Zhuhai-Macau Bridge will drive up mainland tourist numbers and benefit the whole retail market in the city.
September tourist arrivals rose 1.8 percent from a year earlier to 4.72 million, according to the Hong Kong Tourism Board, the slowest growth since January.
The count of mainland visitors grew 3.9 percent, the slowest so far in 2018, accounting for 78.7 percent of the total.
Sales of jewellery, watches, clocks and valuable gifts increased 2.2 percent in September, compared with a revised 20.8 percent surge in the previous month, government data showed.
Growth in medicines and cosmetics rose 4.9 percent from a revised 16.2 percent in August, while department store sales were up 2.0 percent compared with a 11.7 percent growth in August.
Cosmetic chain Sa Sa International Holdings saw slower growth in quarterly sales with average sales per transaction of local customers rising 2.8 percent, but mainland tourists down by 2 percent. Sa Sa International said consumer sentiment turned sour due to a weaker Chinese currency and stock market volatility.
Hong Kong-based Chow Tai Fook Jewellery Group and smaller rival Luk Fook Holdings (International) also posted slower store sales growth in July-Sept period as compared with the previous quarter.