Singapore: Retail Sales remain healthy

Senior Economist at UOB Group Alvin Liew reviews the latest Retail Sales release in Singapore.

Key Takeaways

“Even as Singapore’s retail sales declined by -1.3% m/m in Aug (from 0.7% in Jul), that still translated to a 13.0% y/y expansion for Aug (from 13.9% in Jul), the fifth consecutive month of double-digit growth. Excluding motor vehicle sales, the m/m decrease was more pronounced at -1.8%, (from 0.6% in Jul), translating to a +16.2% y/y increase (from 18.4% y/y in Jul).”

“While the growth fell short of forecast, Aug retail sales growth still added to a solid foundation for domestic demand in 3Q22. While we note that most of the main segments recorded m/m declines in Aug, that could likely be some element of normalisation after the strong post-reopening in Apr (2022) surge from pent-up demand. According to the Department of Statistics Singapore, the y/y increase was attributed to y/y increases recorded in most of the key segments of retail sales.”

“Year-to-date, retail sales grew by 11.2% y/y. We believe domestic retailers will likely see continued domestic and external support, complemented by the return of major events such as the F1 night race, various concerts and BTMICE activities (Business Travel and Meetings, Incentive Travel, Conventions and Exhibitions) attracting tourist arrivals, while the tightening domestic labour market will also contribute to domestic consumption demand. The low base effect is likely to continue to uplift retail sales growth prints in the coming months. Barring the re-emergence of fresh COVID-19 or other health-related risks in Singapore and around the region (leading to re-imposition of social and travel restrictions, which is not our base case), we project retail sales to expand by 8.5% in 2022 (implying a more conservative forecast of around 4% growth in the remaining months of 2022).”

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