Hong Kong’s retail sales grew at the slowest pace in July since the global financial crisis as consumer sentiment weakened and mainland Chinese visitors pared spending on luxury goods.
Sales rose 3.8 percent, the least since September 2009 and down from an 11 percent gain in June, a government statement showed yesterday. The median forecast in a Bloomberg News survey of nine economists was for an 8.8 percent increase and none predicted such a small gain.
China’s slowdown is rippling through Hong Kong by dragging on exports, weighing on confidence and encouraging the millions of mainlanders who visit each month to be more cautious in their spending. That has hurt sales of luxury goods including watches and jewelry in the former British colony.
“Mainland visitors may be spending less on high-end luxury goods,” said Donna Kwok, an economist at HSBC Holdings Plc in Hong Kong. “Hong Kong consumer confidence has also weakened recently, weighed down by continued turbulence in global financial markets.”
Watch, clock and jewelry sales gained 0.9 percent in July from a year earlier, compared with an increase of 51 percent in the same month of 2011.
“Most of the mainland customers are cutting their spending and businessmen don’t need as many luxury watches to give out as gifts as they did a year ago, due to a sharp decline in business activities in the mainland,” Stanley Lau, managing director of Global Timepieces Ltd. and deputy chairman of the Federation of Hong Kong Industries said last month.
The Hong Kong government said in yesterday’s statement that consumer sentiment seems to have “turned more cautious in view of the deterioration in the external economic environment.”
The benchmark Hang Seng Index of stocks closed at the lowest level in a month yesterday on concern that the U.S. Federal Reserve may hold off on additional stimulus measures as the global economy falters.