Singaporean retail sales grow above expectations in January

Singaporean retail sales recovered more than anticipated in the month of January. On a year-on-year basis, the retail sales rose 7.6 percent, a recovery from December’s revised print of a fall of 5.8 percent. The year-on-year print was above the Bloomberg consensus expectations of 2.6 percent. Sequentially, the retail sales rose 0.2 percent, as compared with December’s fall of 2.3 prcent.

On a year-on-year basis, this is the highest print seen since February 2018. Stripping autos, retail sales rose 5.3 percent year-on-year, as compared with December’s 2.8 percent fall. This was also the strongest print since February 2018. In particular, motor vehicle sales also rose sharply by 20 percent year-on-year in January, as compared with the fall of 20.7 percent in December 2018.

Given that the CNY festive season came in early February 2019, the January retail sales was possibly lifted by pre-CNY shopping, which could be seen in the stronger sales chalked up in segments like wearing apparel & footwear, department stores, supermarkets & hypermarkets and food retailers, noted Selena Ling, Head of Treasury Research & Strategy, OCBC Bank. Computer & telecommunications equipment were the only segments that recorded a decline. This was linked to lower demand for mobile phones in this period, as well as optical goods & books.

Nevertheless, doubts continue to be there if the retail sector is finally emerging from its slump. The overall retail sales had dropped for six months out of the 12 months last year, partially because of the disruption from e-commerce and reduced average tourist spending. In 2018, the CNY spike in retail sales in February did not last and March slipped back to a 1 percent year-on-year decline.

“The key to watch would be if retail sales can sustain in positive growth territory in the coming months or if it will quickly reverse back into the doldrums post-CNY, which is actually a high possibility given the high base in February 2018”, added Selena Ling.