Hong Kong's Oct retail sales grow for 8th month as tourism picks up

Hong Kong’s retail sales expanded for an eighth consecutive month boosted by improved consumer sentiment and a continued revival in tourism, especially from the Chinese mainland.

October retail sales grew 3.9 percent from a year earlier to HK$37.5 billion ($4.80 billion) in value terms, following their fastest pace of growth in more than 30 months in September, government data showed on Thursday. Retail sales rose a revised 5.7 percent in September.

In volume terms, sales rose 3.6 percent from a year earlier, compared with revised 5.6 percent growth in September.

Tourist arrivals rose 6.6 percent in October, the highest percentage growth since March, with mainland visitors up 8.3 percent, according to the Hong Kong Tourism Board. Mainland visitors accounted for 76.4 percent of the total.

In September, tourist arrivals rose 4.8 percent, with visitors from the mainland rising 7.2 percent.

“Looking ahead, the favourable income and employment situation, together with the ongoing recovery of inbound tourism, should continue to render support to retail business in the near term,” the government said in a statement.

The rebound continues after Hong Kong’s retail sales shrank for the third year in a row in 2016 and by the most in nearly two decades, hurt by the city’s economic downturn and fewer tourists from China.

Hong Kong’s trade-reliant economy posted slower growth of 3.6 percent in the third quarter, but strong consumption and rebounding exports led the government to nudge up its growth outlook for 2017.

The still-solid momentum puts the former British colony firmly on track to achieve the government’s revised full-year estimate of 3.7 percent growth for 2017 as buoyant stock and property markets helped spur consumer spending.

Sales of jewellery, watches, clocks and valuable gifts rose 8.4 percent in value terms in October, marking their fourth consecutive month of growth. That compared with a revised 14.8 percent jump in September.

Hong Kong’s retailers have been reporting stronger sales on improved consumption and tourism.

Last week, Chow Tai Fook Jewellery Group Ltd posted a 46 percent rise in first-half profit and said it would continue expanding in the mainland in the second.

China’s top jeweller said it expected its rental costs to decline and was upbeat on its future performance.

Smaller rival Luk Fook Holdings International, which saw its first-half profit surge 21 percent, also said it was “cautiously optimistic” about the business development in Hong Kong for the second half of the financial year.

For the first 10 months of 2017, Hong Kong’s retail sales increased 1.2 percent in value term year-on-year and 1.1 percent in volume terms.