Singapore retail sales growth rises to higher-than-expected 4% in August
Elysia Tan
SINGAPORE’S retail sales rose 4 per cent on year in August, climbing from the revised 1.3 per cent growth recorded in July, Department of Statistics (Singstat) data showed on Thursday (Oct 5).
The month’s figure, which extended expansion for the seventh straight month, was higher than the median 0.9 per cent rise expected by private-sector economists polled by Bloomberg.
On a month-on-month seasonally adjusted basis, retail sales rose 1.7 per cent, extending the revised 0.8 per cent expansion charted in July.
August’s estimated total retail sales value was S$4 billion, with online sales accounting for 12.2 per cent.
Excluding motor vehicles, retail sales still expanded by 3.7 per cent from the year-earlier period, marking the 18th consecutive month of expansion. It also gained sequentially – up 1.9 per cent on a seasonally-adjusted basis.
“The August retail sales performance is the strongest since March 2023, while retail sales excluding automobiles were also the highest since April 2023,” said OCBC chief economist Selena Ling.
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Economists partially credited the return of overseas visitors for retail sales’ continued expansion and pickup, with DBS economist Chua Han Teng noting that visitor arrivals in August 2023 recovered to 75 per cent of August 2019 levels.
He also highlighted the role of Singapore’s resilient labour market conditions amid still-low unemployment rate, while Ling noted the resilience of private consumption.
Economists agreed that ongoing travel recovery will remain key to supporting retail sales growth.
“Visitor arrivals saw a seasonal dip to 1.31 million in August (from 1.42 million in July),” said UOB head of research Suan Teck Kin and associate economist Jester Koh. The team noted a similar “post-summer school holiday seasonal decline” in arrivals from China in August.
Arrivals from China for the first eight months of 2023 were equivalent to 33 per cent of levels observed in the corresponding period in 2019, they said. “(This implies) further room for recovery for the rest of 2023 and into 2024 as airlines continue to ramp up flights and flight capacities between Singapore and China.”
They also noted “major events such as various sports, popular concerts and BTMICE (Business Travel and Meetings, Incentive Travel, Conventions and Exhibitions) activities”.
Possible frontloading of purchases ahead of the Goods and Services Tax hike in January 2024, and upcoming disbursements of cash support and vouchers as part of government packages, will also support retail growth, said the UOB team and Chua.
“From a statistical perspective, base effects are also likely to become more favourable, as we head towards end-2023,” Chua added.
But he cautioned: “Cooler wage gains amid an uncertain economic environment could pose downside risks to consumers’ discretionary spending.”
Year on year, most retail sales categories posted growth in August.
Food and alcohol retained its pole position as the strongest category, said Chua, noting that it is “a key beneficiary” of ongoing international travel recovery. Singstat attributed the category’s double-digit growth to increased sale of alcoholic products, including those sold in duty-free shops.
“Improvement in retail sales was more broad-based in August, with 11 out of 14 categories recording positive month-on-month increases (versus four out of 14 categories in July),” said the UOB team.
Sales of food and beverage services jumped 8.6 per cent on the year in August, more than the 6.6 per cent expansion in the preceding month. It was up by 2.8 per cent on a monthly seasonally adjusted basis.
On the year, growth was recorded across all segments:
- Restaurants (5.3 per cent)
- Fast food outlets (7.8 per cent)
- Food caterers (29.8 per cent)
- Cafes, food courts and other eating places (7.7 per cent)
On a seasonally adjusted monthly basis, all categories were up, with food caterers leading the sales growth at 3.7 per cent.
Food and beverage services receipts amounted to S$1 billion, with online sales accounting for an estimated 23.1 per cent.
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