Singapore retail sales slowed to 6.4% in November

All but one sector reported lower sales, guess what?

According to Barclays Capital, Singapore's retail sales growth slowed to 6.4% y/y in November from 8.4% in October (BarCap: 6%; consensus: 6.7%). Seasonally adjusted, retail sales fell 0.6% m/m, after rising 6% in October. Most of the payback can be attributed to lower sales of vehicles, clothing and footwear, recreational goods, and watches and jewellery - all of which increased sharply in October.

Indeed, only sales of ICT goods maintained the previous month's strong momentum. As such, excluding vehicles, retail sales were flat on a m/m sa basis and grew 6.7% y/y in November, down from 8.4% in October.

Here's more from Barclays :

We think retail sales are likely to weaken gradually, alongside softer growth conditions. Bid values for COE premiums fell in December and January, a sign of softer consumer sentiment. Real wages started to slip in Q3 and are likely to remain subdued as growth slows but inflation remains fairly elevated (BarCap CPI inflation forecast: 5.3% in 2011, 3.3% in 2012).

This report is unlikely to have an impact on the second estimate of Q4 GDP. Earlier in the month, advance estimates show that the Singapore economy contracted 4.9% q/q saar or grew 3.6% y/y in Q4 to average 4.8% for 2011. This outcome disappointed our expectations but did not come as a surprise to policymakers. A sharp decline in manufacturing activity, largely reflecting a pullback in biomedical output, offset stronger services activity and led to the overall contraction in Q4. We think it is possible that the final estimate for Q4 GDP may be revised slightly higher, and look for confirmation in December's export and IP data out in the next two weeks. For 2012, the government expects growth of 1-3% (BarCap: 3%).

Our base case remains for the Monetary Authority of Singapore to maintain a "modest and gradual appreciation" stance for the SGD NEER in April, barring severe financial contagion from the European debt crisis or a hard landing in China. Inflation will likely be more persistent than earlier expected - we expect a December print of 5.5%, roughly unchanged from the preceding two months. In our view, the MAS will prefer to remain vigilant against a resurgence in cost pressures - arising from a tight labour market and imported food and energy prices.

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

Tags: Singapore retail sales, Singapore retail sales November, Barclays Capital