December retail sales edge up just 0.4%


Retail sales were almost flat last December with various industry segments turning in patchy performances. Turnover in the retail sector grew 2.2 per cent last year - less than half the pace seen in 2015 - despite a record number of overseas visitor arrivals, suggesting that domestic demand was lower.

Retail takings edged up just 0.4 per cent in December from a year earlier as sales at car showrooms, which had previously enjoyed double-digit percentage growth, slowed to a crawl.

Motor vehicle sales inched up just 0.9 per cent from the same month in 2015, a muted end to 2016 after strong car sales stopped overall retail turnover from sinking into the red for much of the year.

Excluding vehicles, retail takings rose 0.3 per cent in December over the same month a year earlier - the first such positive reading since January last year, noted OCBC economist Selena Ling.

Sellers of medical goods and toiletries, recreational goods, and furniture and household equipment saw stronger takings year on year, but other segments, including clothing and footwear, as well as computer and telecommunications equipment, fared less well.

December's patchy showing capped a lacklustre year for the Singapore retail scene.

Ms Ling noted that Singapore saw a record number of visitor arrivals at 16.4 million last year - led by Indonesia and China - as well as record tourism receipts at $24.8 billion, up 13.9 per cent from 2015.

"Interestingly, the shopping component in tourism receipts rose strongly by 48 per cent for the first three quarters of 2016, but did not seem to benefit the local retail scene to the same quantum. This could imply that the domestic households probably tightened their belts and cut back on private consumption," she said.

Ms Ling expects retail sales to continue growing at a modest pace this year.

She noted that the Singapore Tourism Board expects visitor arrivals to grow between zero and 2 per cent this year, with tourism spending expected to rise 1 to 4 per cent amid intensifying regional competition for the tourism dollar.

"With the softening in the domestic labour market conditions, private consumption may stay restrained in the first half of the year," she added.

A version of this article appeared in the print edition of The Straits Times on February 16, 2017, with the headline 'December retail sales edge up just 0.4%'. Print Edition | Subscribe