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16-12-2011, 08:19 AM
The Straits Times
Dec 16, 2011
Surprise 8.5% boost for retail sales in October
By Robin Chan
SINGAPORE consumers seemed to brush aside any concerns over the euro zone crisis in October as retail sales rose far better than expected.
The monthly retail sales index showed a surprise 8.5 per cent rise in October from a year earlier, far higher than the median estimate of 1.3 per cent by nine economists, boosted by a tight labour market and tourist arrivals.
Compared with September, the index rose 6.1 per cent after adjusting for seasonal factors, according to a report from the Department of Statistics yesterday.
It was a welcome boost after weak performances in August and September when retail sales grew 3.5 per cent and a revised 0.2 per cent respectively after double-digit growth in previous months.
Sales of cars, which form a quarter of the weight in the overall index, rose 8.4 per cent from October last year.
But even taking away sales of cars, retail sales rose 8.6 per cent year on year and 4 per cent from September, the latter being the index's highest rise since April.
Barclays Capital economist Leong Wai Ho said: 'While we expected an improvement, we believed it would be fairly muted, given ongoing financial market volatility and rising economic uncertainty.
'The support from a tight labour market and high property prices must have been an important mitigating factor.'
Singapore's unemployment rate was at 2 per cent in the third quarter, according to the latest figures from the Manpower Ministry yesterday, with 31,900 jobs added in that quarter.
HSBC economist Leif Eskesen said: 'While partly a payback after September's hesitant spending, Singaporeans and the many visiting tourists from the region in October demonstrated their passion for shopping and that the domestic growth engine has not run out of gas.' CIMB economist Song Seng Wun said visitor arrivals from China and Japan were particularly strong in October.
Consumers bought more fuel, computers and watches and jewellery, which all saw double-digit year-on-year growth of between 16.4 per cent and 23.7 per cent.
On a month-on-month basis, the highest jump was recorded in sales of phones and computers, at 14.9 per cent.
But economists are expecting retail sales to weaken from here on. The Singapore economy will most likely contract in the fourth quarter, and will slow to 1 per cent to 3 per cent growth next year amid a more turbulent global economy.
Credit Suisse economist Wu Kun Lung expects Singapore's unemployment rate to start rising. This will impact real wage growth and consumer spending.
Mr Leong said: 'The Government issued a gloomy economic outlook and implemented another round of property market cooling measures that have dampened buying sentiment and fostered expectations that prices will fall.' He noted that bid values for certificate of entitlement premiums have also fallen this month.
Mr Eskesen added: 'The elevated level of uncertainty about the economic outlook is likely to make shoppers think twice before they buy that extra pair of shoes, a new gadget, or go out for a nice meal.'
Dec 16, 2011
Surprise 8.5% boost for retail sales in October
By Robin Chan
SINGAPORE consumers seemed to brush aside any concerns over the euro zone crisis in October as retail sales rose far better than expected.
The monthly retail sales index showed a surprise 8.5 per cent rise in October from a year earlier, far higher than the median estimate of 1.3 per cent by nine economists, boosted by a tight labour market and tourist arrivals.
Compared with September, the index rose 6.1 per cent after adjusting for seasonal factors, according to a report from the Department of Statistics yesterday.
It was a welcome boost after weak performances in August and September when retail sales grew 3.5 per cent and a revised 0.2 per cent respectively after double-digit growth in previous months.
Sales of cars, which form a quarter of the weight in the overall index, rose 8.4 per cent from October last year.
But even taking away sales of cars, retail sales rose 8.6 per cent year on year and 4 per cent from September, the latter being the index's highest rise since April.
Barclays Capital economist Leong Wai Ho said: 'While we expected an improvement, we believed it would be fairly muted, given ongoing financial market volatility and rising economic uncertainty.
'The support from a tight labour market and high property prices must have been an important mitigating factor.'
Singapore's unemployment rate was at 2 per cent in the third quarter, according to the latest figures from the Manpower Ministry yesterday, with 31,900 jobs added in that quarter.
HSBC economist Leif Eskesen said: 'While partly a payback after September's hesitant spending, Singaporeans and the many visiting tourists from the region in October demonstrated their passion for shopping and that the domestic growth engine has not run out of gas.' CIMB economist Song Seng Wun said visitor arrivals from China and Japan were particularly strong in October.
Consumers bought more fuel, computers and watches and jewellery, which all saw double-digit year-on-year growth of between 16.4 per cent and 23.7 per cent.
On a month-on-month basis, the highest jump was recorded in sales of phones and computers, at 14.9 per cent.
But economists are expecting retail sales to weaken from here on. The Singapore economy will most likely contract in the fourth quarter, and will slow to 1 per cent to 3 per cent growth next year amid a more turbulent global economy.
Credit Suisse economist Wu Kun Lung expects Singapore's unemployment rate to start rising. This will impact real wage growth and consumer spending.
Mr Leong said: 'The Government issued a gloomy economic outlook and implemented another round of property market cooling measures that have dampened buying sentiment and fostered expectations that prices will fall.' He noted that bid values for certificate of entitlement premiums have also fallen this month.
Mr Eskesen added: 'The elevated level of uncertainty about the economic outlook is likely to make shoppers think twice before they buy that extra pair of shoes, a new gadget, or go out for a nice meal.'
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