Singaporean retail sales rose above expectations in June, driven by rise in auto sales. On a year-on-year basis, retail sales grew 2 percent, while it was up 1.2 percent on a sequential basis. The Bloomberg consensus expectations were for the retail sales to rise 1.2 percent year-on-year. Stripping autos, retail sales rose a more tepid 0.2 percent year-on-year in June.
The main drivers for the outperformance seen in June is motor vehicles that rose sharply by 9.7 percent year-on-year. Car buyers were possibly attracted back to the car showrooms in the midst the declining COE premiums which dropped to SGD 33.9k and in late June and bottomed at SGD 25k in early July for category A, whilst category B also dropped to SGD 33.9k and in late June and bottomed at SGD 31k in early July.
Looking ahead, retail sales are expected to average 0.2 percent year-on-year for 2018, which is quite subdued compared to the 1.8 percent year-on-year seen last year, noted Selena Ling, Head of Treasury Research & Strategy, OCBC Bank. For the first half of 2018 of this year, retail sales rose a very tepid 0.2 percent year-on-year, compared to 0.9 percent year-on-year for the same period last year.
“This assumes that 2H18 retail sales would not see any significant pick-up. This is given the more cautious economic outlook amid the global trade tensions which is affecting international trade, investments and business confidence, including Singapore, as warned by PM Lee during his National Day message”, added Selena Ling.
