In November, Singapore’s retail sales declined by 3.7% month-over-month, compared to a gain of 0.1% month-over-month in October. This marked a reversal from the previous two months, in which sales had increased month-over-month. That still amounted to a 6.2% year-over-year gain in November (down from a downwardly revised 10.3% increase in October).
After seven consecutive months of double-digit growth, year-over-year growth reverted to single digits for the first time. If they exclude motor vehicle sales, the monthly loss was -4.3% (compared to 0.7% in October). It was equating to an 8.7% year-on-year gain (compared to 14.2% year-on-year growth in October).
Many Industries Detect the high Decline in Growth
When the most recent rises in retail sales were looked at, it was found that eight of the fourteen main sectors had m/m losses in November. This was an increase from the five that were reported in October. In October, the number of sectors with m/m losses was reported at five.
Revenue dropped the most in the communications and computer equipment industries from the previous month to the current one. This was followed by department stores, other companies, watches and pieces of jewelry, and articles of clothing and footwear as the industries that saw the second-greatest drop.
The year-over-year decreases in many of these (discretionary expenditure) parts may have been affected by the start of school vacations. It might have been induced by the beginning of year-end holidays for many Singaporean household members. It led to a decrease in household demand during the month of November.
The projection that retail sales will rise by 10% in 2022 has remained the same since the publication of the last report. It indicates that a more realistic growth of around 3.1% will occur on December 22. Retail sales have seen a 10.8% increase this year compared to last year’s period. Inflation pressures are still rising and could cause people to spend less money over time.
It could be a big problem for the retail sales business in 2023. This is in addition to the one-point rise in the GST that will take place on January 1, 2023, when it will go from 7% to 8%.
As we get closer to the new year, it is also anticipated that the beneficial influence brought on by the low base will begin to wane. These three problems pose a significant threat to the retail industry’s revenue.
Travel and Tourism to Help in the Growth of many Businesses
The recovery in business and leisure air travel and inbound tourism, which will help many in-person service sectors, could still lead to healthy sales growth. These factors will benefit many sectors of the economy and many service sectors. But the effect of China’s restart is hard to predict because many things could stop Chinese travelers from returning.
China’s resumption of operations on January 8 is expected to be suitable for businesses in Singapore that have to do with travel and tourism, like retail. This is because China will likely return to normal operations on January 8.
China, on the other hand, is a country that has a massive chance of going against even the most optimistic predictions. As a result, they concluded that the forecast for the rise in retail sales should remain at 2.3% for the year 2023.