Soft sales for cars, watches and jewellery
THE shiny stuff is not glittering now. Sales of cars, watches and jewellery plunged by double digits in April, dragging down Singapore's retail sales by 9 per cent compared with a year ago.
While loan curbs continue to take a bite out of motor vehicle sales, economists say flagging tourist arrivals - particularly those from China - could be tarnishing discretionary spending here.
Stripping out sales of motor vehicles - which were down 36.1 per cent from April last year - retail sales still experienced a contraction of 1.3 per cent, said the Department of Statistics on Friday. This was in part due to a 16.3 per cent fall in sales of watches and jewellery.
The data fell far short of economists' expectations; the median estimate of eight forecasts submitted to Bloomberg was for a 3.6 per cent year-on-year decline in retail sales. Excluding motor vehicles, the market was expecting a marginal 0.1 per cent increase in retail sales.
The continued tumble in motor vehicle sales did not come as a surprise, since financing measures have prompted buyers to think twice before spending on a car.
But economists BT spoke to were taken aback by the big hit to watch and jewellery sales; they said the last time the category registered double-digit declines was during the 2008-2009 global financial crisis.
Said UOB economist Francis Tan: "Watches and jewellery are usually quite resilient, and we didn't impose any new taxes - so it's quite strange. I think it might have to do with weakness in visitor arrivals."
While inbound tourism data for April has not yet been released, economists like Mr Tan and CIMB's Song Seng Wun highlighted March's soft performance, where visitor arrivals contracted by 5.2 per cent year-on-year.
"Arrivals from China contracted 19.5 per cent in March, and the Chinese spend a lot on watches and jewellery," said Mr Tan. He cited Singapore Tourism Board figures, which show that 33 per cent of Chinese tourists' expenditure here goes to watches, clocks and genuine jewellery.
Noting that many visitors from China come to Singapore on tour packages which include Malaysia and Thailand, Mr Song said: "A spillover effect from the MH370 incident and Thailand's unrest could have affected arrivals from China... And that spillover effect could still extend into May."
Apart from motor vehicles, and jewellery and watches, other categories which reported lower sales included the recreational goods (-8.8 per cent) and furniture and household equipment (-2.5 per cent) categories.
But there were some silver linings - categories which chalked up stronger growth in sales year-on-year included telecommunications apparatus and computers (6.8 per cent), petrol service stations (4.7 per cent), and medical goods and toiletries (4.1 per cent).
Barclays economist Leong Wai Ho said: "We saw that department store (3.6 per cent), petrol service stations and supermarket sales (1.1 per cent) were relatively stable - meaning there was no change in normal spending patterns among residents."
Mr Leong expects to see some lift in retail spending last month, particularly from consumer electronics, "as Fifa World Cup fever kicks in".
Compared to March, the seasonally adjusted retail sales figure decreased 0.7 per cent in April. Excluding motor vehicles, they declined 1.5 per cent.