Retail sales up 2% in June, driven by vehicles

Car showrooms were packed with potential buyers after COE prices dipped in late June. However, if motor vehicle sales were excluded, retail takings in June would have just inched up a marginal 0.2 per cent.
Car showrooms were packed with potential buyers after COE prices dipped in late June. However, if motor vehicle sales were excluded, retail takings in June would have just inched up a marginal 0.2 per cent.ST PHOTO: ALPHONSUS CHERN

Fall in COE prices in late June likely contributed to boost, says economist

Retail sales in Singapore grew at a faster clip in June, driven mainly by a surge in motor vehicle sales, according to the latest release by the Singapore Department of Statistics.

Retail takings went up 2 per cent in June compared with the same period a year ago, beating economists' expectations of a 1.2 per cent expansion.

It was also an improvement compared with the revised 0.2 per cent growth in May.

But if motor vehicle sales were excluded, retail takings in June would have ticked up a marginal 0.2 per cent.

Unsurprisingly, the motor vehicle segment grew the fastest in June, with a 9.7 per cent jump in sales.

OCBC economist Selena Ling said this was most likely boosted by the fall in certificate of entitlement (COE) prices in late June - the premium dipped to $34,110 for category A (for cars up to 1,600cc and 130bhp) and $33,900 for category B (above 1,600cc or 130bhp).

The next best performer came from petrol service station sales at 9.3 per cent, largely due to a rise in petrol prices.

  • 9.7%

    Jump in motor vehicle sales, the fastest-growing segment in June.

  • 9.3%

    Jump in petrol service station sales, largely due to a rise in petrol prices, and second only to motor vehicle sales.

Sales of medical goods and toiletries increased 5.8 per cent, while sales of recreational goods expanded by 5.7 per cent, mainly from sporting equipment during the World Cup period.

In contrast, sectors which registered a decline in sales over this period included computer and telecommunications equipment, which fell 8.5 per cent; watches and jewellery, which declined 6.3 per cent; and optical goods and books, which dipped 2.6 per cent.

This could mean that the Great Singapore Sale, which began in June, had "little impact on consumer appetite" on the above items, said Ms Ling.

On a month-on-month basis, seasonally adjusted retail sales went up by 1.2 per cent in June.

But with motor vehicles stripped out, retail sales decreased 1.8 per cent.

The total retail sales value in June was estimated at $3.9 billion. Online retail sales contributed to about 4.1 per cent of the total.

In a sign that consumer sentiment could be picking up, the food and beverage services index saw improvements in June, expanding 2.9 per cent year on year.

Restaurant spending was up 4.8 per cent compared with a year ago, while fast-food spending jumped 8.4 per cent.

The total sales value of food and beverage services in June was estimated at $677 million, higher than the $658 million last year.

But looking ahead, Ms Ling anticipates retail sales growth to average 0.2 per cent for 2018, which she says is "very subdued" compared with 1.8 per cent for last year.

"This is given the more cautious economic outlook amid global trade tensions which are affecting international trade, investments and business confidence - including Singapore's - as warned by Prime Minister Lee Hsien Loong in his National Day message," she added.

A version of this article appeared in the print edition of The Straits Times on August 11, 2018, with the headline 'Retail sales up 2% in June, driven by vehicles'. Print Edition | Subscribe