Hong Kong’s retail sales of jewellery, watches, clocks and valuable gifts in January 2019 were up 4.7% year-on-year after registering a drop in the preceding month, according to statistics released by the HK government last week, as higher tourist arrivals from the Mainland and pre-Lunar New Year festive shopping lifted overall retail sales by 7.1%.

The Hong Kong Tourism Board reported that January tourist arrivals rose to 6.78 million, up 27.2% from Jan 2018, with the number of visitors from the mainland (who make up over 80% of the total arrivals) rising by 34.8%.

The increase, coupled with the impact of pre-season shopping, pushed retail sales up 7.1% in value to US$ 48.1 million and 6.9% in volume terms. This was the sharpest increase recorded in the past five months.

However, given that the Lunar New Year fell on February 5 this year (as against February 16 last year), and so holiday season shopping commenced earlier than in 2018, a better comparison of the overall consumer sentiment will only emerge when cumulative sales over the first two months of the year are compared, analysts said.

In fact, the HK Retail Management Association (HKRMA) said in a statement that its member companies believe that “the sales performance will be the same as a year earlier when combining January and February 2019”.

There has been some improvement in the employment situation in HK which along with higher tourist traffic would normally have boosted retail sales. However, the overall sentiment is still cautious due to uncertainty amidst the ongoing US-China tariff war.

Mirroring the outlook of its member companies, the HKRMA is forecasting low single-digit growth in 2019.