HONG KONG. Hong Kong’s October retail sales are expected to show a healthy upturn in volume terms year-on-year as the territory welcomes rising numbers of tourists. However competitive pricing and weak domestic demand could depress any growth in the value of sales.
“The retail figures will be positive as tourists continue to spend and boost sales,” said a Hang Seng Bank economist, predicting an October retail sales rise of +1.7% by volume year-on-year, but just +0.5% by value.
Local demand remains sluggish though, he said. While consumer confidence improves with the growth of job opportunities, many Hong Kong residents still worry about job security.
Overall the October figures, are expected to be slightly better than September’s, when retail sales volume rose marginally by +0.8% year-on-year, and sales value figures disappointed with a -0.1% decline.
In the first six months of 2003 Hong Kong retail sales declined -6.7% year-on-year in value terms, with a fall of -4.2% in volume. The first nine months showed a -4.7% fall by value and -2.4% decline in volume.
Tourist arrivals in October rose to a record high of 1.6 million, up +37.2% year-on-year, compared with 1.4 million in September, the Hong Kong Tourism Board said. The growth was driven by arrivals from China; 670,000 mainland Chinese visitors arrived in the territory in October, up +68.4% year-on-year. November figures are not yet published.
Economists expect Hong Kong retail sales for the full year to remain negative, despite the tourism recovery.
