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Singapore retail sales down by 1.8% to S$3.6b in July
SINGAPORE retail sales, which have been in decline since February, fell again for the sixth month in July - though not by as much as some private economists had feared.
Retailers here took in S$3.6 billion in July, down by 1.8 per cent year on year - easing from June’s 8.9 per cent drop, and less severe than the 2.9 per cent slip in a Bloomberg poll. Online sales made up 5.6 per cent of these transactions.
But, when motor vehicles were excluded, retail sales slid by 2.4 per cent year on year, according to data released by the Department of Statistics on Thursday.
The slump was led by lower sales of furniture and household goods, down by 8.3 per cent; computer and telecom equipment, down by 7.7 per cent; and watches and jewellery, down by 6.2 per cent. These sharp declines were largely in discretionary items, observed Selena Ling, head of treasury research and strategy at OCBC Bank.
Yet the drop in takings was felt across the board, with medical goods and toiletries, motor vehicles, and supermarkets and hypermarkets the only categories to post year-on-year sales growth.
On a seasonally adjusted monthly basis, retail sales were up by 2.6 per cent compared with June’s figures - but dipped by 0.7 per cent when the impact of auto sales was stripped out.
Meanwhile, food and beverage services receipts rose by 3.2 per cent year on year in July to S$877 million, on growth at all types of eateries, but shed 1.5 per cent on the month before.
Real estate consultancy Savills had suggested in an August report that new eateries at the Jewel Changi Airport mega-mall - which opened in April - may have driven fast food outlet earnings growth in Singapore in the second quarter.
But CIMB economist Song Seng Wun likened the opening of new malls to “cutting your leg off and sticking it somewhere else”, as trendy shopping centres such as the redeveloped Funan could cannibalise traffic elsewhere on the island, he told The Business Times over the phone.
The Ministry of Trade and Industry previously said that it expects economic growth in 2019 to be supported by private consumption, given firm labour market conditions.
But the labour outlook has been weak of late, half-year figures from the Manpower Ministry now suggest. The unemployment rate for Singapore residents inched up to 3.1 per cent in June, up from 3 per cent in March, in figures that were also put out on Thursday.
There are “early signs of job market softening”, Citi economists Kit Wei Zheng and Ang Kai Wei said in a flash note - although they do not expect the central bank to hit the brakes on monetary policy just yet, as “cyclical slowdown in productivity continues to outpace that of wages”.
Pointing to how food and beverage services jobs grew by 1.2 per cent in the first six months, Mr Song from CIMB expressed optimism about a consumption recovery in that sector. The renowned gourmand said: “Businesses are now selective about hiring, but we also see selective spending.”
Still, retail sales are expected to remain in negative territory for at least another two months, with any pick-up likely to come mainly on a low base, he added.
OCBC’s Ms Ling, citing both external headwinds such as global trade tensions, as well as the softer domestic job market, said: “Looking ahead, we continue to anticipate a gradual erosion in consumer confidence and tightening of belts by households.”
The Manpower Ministry highlighted weak hiring intentions in the retail trade sector in particular, she noted.