Hong Kong’s retail gross sales unexpectedly dropped in November by probably the most in eight months as town struggled to shake off the lingering results of its pandemic-era controls and a slowing international economic system.
Retail gross sales worth fell 4.2 % from a yr in the past, the Census and Statistics Division mentioned Wednesday. That was far worse than the forecast for a 4.8 % rise in a survey of economists, and likewise decrease than the 4 % improve in October. It was the worst efficiency since March, when gross sales plunged 13.8 %.
Gross sales quantity decreased 5.3 %, in contrast with economists’ expectations of a 3.3 % rise, with a authorities spokesman saying in an announcement that the retail enterprise had “softened” in November.
The drop that month could also be as a result of Hong Kong’s reopening of its worldwide border, in accordance with Samuel Tse, an economist at DBS Financial institution Ltd.
“Everybody rushed out for outbound journey. That explains why retail gross sales are actually dangerous,” he mentioned. “Foreigners weren’t touring to Hong Kong when Covid curbs nonetheless remained, whereas Hong Kong residents have been dashing out.”
The retail knowledge covers client spending on items however not on companies akin to catering, medical care and leisure. These companies account for over 50 % of whole client spending.
The sector struggled all through 2022 as town was hit by a brutal Covid wave that killed 1000’s and led to extra social distancing guidelines and enterprise closures. That was adopted by the sluggish reversal of journey restrictions, however solely on the finish of December did Hong Kong get rid of the final of its main Covid guidelines, together with a requirement that inbound travellers take a PCR take a look at.
Town has handed out spending vouchers to help retailers, although the federal government has mentioned prior to now that “tightened monetary situations” would offset the results of that support. World headwinds together with rising rates of interest and a worldwide drop-off in demand have weighed closely on the economic system.
In Wednesday’s assertion, the federal government spokesman once more cited tighter situations as more likely to weigh on native demand, although mentioned that the additional rest of social distancing measures and an enhancing labor market will present some help. The spokesman additionally mentioned that an anticipated improve in customer arrivals ought to assist the sector.
An extended-awaited reopening of Hong Kong’s border with mainland China is more likely to increase the economic system and raise retail gross sales within the coming months. Metropolis leaders have mentioned they intend to start out that reopening by the center of this month.
Earlier than the pandemic, 80 % of Hong Kong’s guests have been from mainland China, famous Tse of DBS.
“So long as the border stays shut, even in the event you open to the remainder of the world at most you may get 20 % of tourism,” he mentioned, including that January knowledge ought to see a “sharp soar” with an much more materials one after the Lunar New 12 months vacation interval.
Monetary Secretary Paul Chan has mentioned he’s optimistic in regards to the metropolis’s prospects and expects the economic system to rebound because the border reopens. Economists at Goldman Sachs Group Inc. final month predicted the Asian hub might see an estimated 7.6 % increase to gross home product as exports and tourism revenue climb.
By Kari Lindberg
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