SEPTEMBER'S retail sales index rose an unexpected 7.2 per cent year-on-year, after August's 4.2 per cent increase, largely due to a sharp rebound in motor vehicle sales.
Excluding motor vehicles, retail sales rose by 8.4 per cent from last September, compared to August's year-on-year 11.4 per cent rise.
Data released by Singapore's statistics department yesterday showed that retail sales volume grew 2.8 per cent from last September after accounting for price changes. Excluding motor vehicles, sales volume grew 4.3 per cent.
However, the data still points to weak retail spending. On a monthly, seasonally-adjusted basis, September's nominal retail sales slipped one per cent from August's figures, a 4.6 per cent fall when motor vehicles are taken out of the equation.
The month-on-month decline was attributed to falls of between 6.2 and 8.1 per cent in sales of petrol, apparel and footwear, watches and jewellery, and recreational goods.
This was despite sales of motor vehicles and furniture and household equipment jumping 29.7 per cent and 11.5 per cent respectively. Sales of telecommunications apparatus and computers, medical goods and toiletries rose too. By the department's estimates, September's retail sales totalled $2.9 billion, against August's $2.7 billion.
Tourist spending from the F1 Grand Prix probably lifted retail sales despite a contraction in September's tourist arrivals, Citi economist Kit Wei Zheng said in a note.
He expects year-on-year changes in the index to hold up for the rest of the year due to "favourable base effects and elevated prices". But, he added that seasonally adjusted monthly changes in retail sales volume will remain soft "as consumers are likely to tighten their belts on growing signs of a prolonged recession".
The statistics department also said yesterday that the catering trade raked in an estimated $416 million in September, 1.4 per cent below August's $422 million, but a 2.4 per cent rise after seasonal adjustment.
This article was first published in The Business Times on Nov 15, 2008.
