Financial crisis hits Sept sales: survey
Updated: 2008-11-01 07:36
(HK Edition)
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Hong Kong retail sales in September probably grew 9 percent from a year earlier, the slowest growth since April 2007, as consumers were hit by heavy losses in the stock market amid the global financial crisis, a Reuters survey shows.
That would be well below the 15 percent sales growth from January to August.
Consumer spending is expected to weaken further, and that could push the territory into a recession, as many people have lost money in the stock market, which has fallen more than 50 percent this year as a result of the financial crisis.
A weak property market and increasing concerns about the economic outlook are also making consumers more cautious, analysts say.
The labor market remains reasonably strong, but the jobless rate crept up to 3.4 percent in September from 3.2 percent in August, indicating the business climate is weakening.
With investment banks recently announcing plans to lay off thousands of staff around the world, and companies in the trade sector likely to be hit by a potential global economic downturn, the jobless rate could rise sharply between now and early next year, hurting consumer spending, economists say.
Inflation, however, which is running at just over 6 percent (excluding temporary waivers introduced by the government on public services) should ease as the economy slows, they said.
Retail sales in August were HK$22.8 billion, a 10.4 percent increase by value and 3.9 percent by volume.
Reuters
(HK Edition 11/01/2008 page2)