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January retail sales up 1.7%, beating forecast

May 5th, 2012 · No Comments


A BETTER-THAN-EXPECTED showing for retail sales in January, buoyed by stronger influx of tourist, reveals a recovery in consumer confidence locally and overseas.

The best ever growth of inbound tourists in five months helped encourage the sale of luxury goods, while the momentum of recovery in retail sales was aided by a strong showing in the food and beverage sector and a moderation in the decline in motor vehicle sales.

Although the Singapore property market’s consensus forecast was for retail sales to go down by 1.3 per cent in January, data released by the Department of Statistics yesterday surpassed those expectations, registering year-on-year growth of 1.7 per cent.

 The encouraging growth stimulate hopes of an upturn in retail sales and consumer confidence, as it builds on the upward revision in December’s figure from a decline of 2.4 per cent to a drop of just 0.7 per cent.

 January’s encouraging growth in retail sales is mainly encouraging as there was a considerable base effect at play as the same index was up 16.4 per cent in January last year, said Deutsche Bank chief economist Taimur Baig.

Tourist influx in Singapore rose 13.4 per cent year-on-year in January and this helped to spur the sale of luxury goods, said Barclays Capital economist Leong Wai Ho, who observed that sales of watches and jewellery rose 6.5 per cent in the same period.

The strongest growth in sales for January came from the F&B sector, which recorded 15.6 per cent growth.

This illustrates an increase in the turnover of restaurants, food caterers and fast-food outlets, all of which increased between 15.7 and 18.2 per cent.

Six other retail sectors documented a rise in sales in January of between 2.9 and 9.4 per cent compared with a year earlier. These were in the retail sales of petrol service stations, supermarkets, telecommunications apparatus and computers, medical goods and toiletries, provision and sundry shops and department stores.

The motor vehicles industry also showed encouraging signs of recovery as its year-on-year decline in January of 2.8 per cent moderated from a drop of 9.6 per cent the month before.

On a monthly basis, motor vehicle sales increased by 9.9 per cent compared to a turn down of 7.7 per cent in December.

Citi economist Kit Wei Zheng said the strong data, specifically in the F&B sector, depicts that consumer sentiment remains flexible and as a result any monetary policy easing next month is doubtful.

‘Resilient domestic demand and tightening labor market may add to core inflation pressures, and with the balance of risks gradually shifting to inflation, MAS easing in April can be effectively ruled out.’


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