May retail earnings fall below estimates
Updated: 2008-07-04 07:30
By Kwong Man-ki and Amy Lam(HK Edition)
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Hong Kong retail earnings have slowed, but May earnings were still up 12.9 percent. AFP |
Hong Kong retail-sales growth in May cooled down as the stock market slump dampened consumer confidence and slowed the tourism sector.
Retail sales rose 12.9 percent by value year-on-year, to an estimated HK$23.1 billion, the government revealed yesterday.
The growth lagged a market consensus of 15 percent, and it slowed down from a revised 18.6 percent gain in April.
In terms of volume, retail sales rose 5.5 percent in May, year-on-year, after gaining a revised 11.5 percent in April.
The increase by value was the slowest since May 2007, not including distortions caused at the start of each year by the Chinese lunar new year holiday.
Sales of food, alcoholic drinks and tobacco dropped 1.2 percent after gaining 1.9 percent in April. Sales of clothing and footwear climbed 8 percent, less than half of the 18.3 percent gain in April. And sales of jewelry, watches and clocks rose 18.4 percent, down from a 32.4 percent increase.
A government spokesman said the expected global economic slowdown, the ongoing financial-market turbulence, inflation and high international commodity prices, the upward pressure on global interest rates and the consolidation in local asset prices in recent months are all likely to have some impact on the local economy and consumer sentiment.
Economists said the slowdown in retail-sales growth is mainly due to a tourism decline and weak stock market sentiment.
Irina Fan, a senior economist at Hang Seng Bank, said the Sichuan earthquake has deterred tourists from the mainland.
"People are unwilling to travel after the devastating earthquake," she said. "And for Hongkongers, some may prefer to donate money instead of spending it shopping."
Fan added that the stock market slump is also hurting consumer confidence. "We can see that last year the wealth effect on rising stock prices helped boost the retail sales," she said, adding that she is concerned about the impact of inflation.
If inflation continues to rise, we could see negative growth in sales volume by the end of the year, she added.
Neil Gardner, director of cards business for Citibank Global Consumer, said inflation will eventually have some impact on retail sales.
Meanwhile, retail sales in June have slowed down, and storms are being blamed for keeping people home instead of shopping.
(HK Edition 07/04/2008 page2)