Hong Kong’s Retail Slump Began Easing Before New Virus Wave
Hong Kong Retail Slump Eased Ahead of December Shopping Period
(Bloomberg) -- Hong Kong’s retail environment showed further signs of improvement in November, although the recovery may have been short-lived as the city was hit with a fresh wave of virus infections and imposed new restrictions late in the month.
The provisional value of total retail sales in November 2020 was HK$28.7 billion ($3.7 billion), down by 4% compared with the same month in 2019. That was better than the median forecast of -7.4% in a Bloomberg survey of economists and an improvement from a revised -8.7% in October. Sales by volume fell 4.7%, according to the government statement.
The economy showed some signs of improvement in the second half of 2020 alongside recoveries across the region as China’s rebound fueled demand. However, that’s been dampened by fresh waves of infections since November, with the city re-imposing social distancing restrictions including shuttering bars and nightclubs to help curb the outbreaks.
Restrictions were tightened further in December ahead of the critical year-end shopping season, with restaurants forced to halt in-person dining after 6 p.m. On Monday the government also pushed back the re-opening of classrooms for more than a month as part of measures to stamp out the spread of the virus.
“As inbound tourism remains at a standstill, and the fourth wave of the local epidemic has weighed on local consumption sentiment since the latter part of November, the business environment of the retail trade will remain challenging in the near term,” the government said in the statement.
The brightening picture in November was due largely to a 22% jump in the value of sales of electrical and other consumer durable goods from a year ago, according to the government statement. Sales of commodities in supermarkets, motor vehicles and parts, and furniture also rose, the data showed.
The government allocated additional support to businesses hurt by the shutdowns and Financial Secretary Paul Chan said in a blog post Sunday that the economy will probably return to growth in 2021 as the recovery strengthens in the second half of the year.
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