Singapore: Retail Sales surprised to the upside in May – UOB

Alvin Liew, Senior Economist at UOB Group, reviews the latest results from the retail sector in Singapore.

Key Takeaways

“Singapore’s retail sales improved further with a better-than-expected 17.8% y/y expansion in May (from 12.1% in Apr). Retail sales excluding motor vehicles rose even higher by 22.6% y/y (from 17.4% in Apr). On a sequential seasonally adjusted basis, retail sales rose by 1.8% m/m, following the slightly revised print of 1.1% in Apr, the 3rd consecutive month of m/m increase. Excluding motor vehicle sales, the m/m increase was higher at 2.7%, (from 1.6% in Apr).”

“While the robust May retail sales growth added to a solid foundation for domestic demand in 2Q22, it should be noted that the y/y increase was distorted by the low base effect of May 2021 when COVID-19 restriction measures were in place, such as international travel restrictions.  Nevertheless, the decent m/m rise continued to signal an improving domestic retail and F&B environment in tandem with a tighter labour market and more importantly, a return of tourist demand.”

“Year-to-date, retail sales grew by 9.6%. Barring the re-emergence of fresh COVID-19-related risks in Singapore and around the region (leading to re-imposition of social and travel restrictions, which is not our base case), we now expect retail sales to expand by 9.0% in 2022 (from previous forecast of 6%) as base effects are likely to continue to uplift retail sales growth prints in the coming months.”