Singapore retail sales unexpectedly weak in July

Singapore's retail sales were worse than expected in July, falling 5 percent from June and adding to signs of a slowdown in consumer spending in one of Asia's fastest-growing economies.
Excluding motor vehicles, which have sold fast this year after record sales in 2003 due to low interest rates and vehicle taxes, total sales fell 2.0 percent, the Department of Statistics said in a monthly report.
"It's a little bit weak but there is no need for alarm bells," said Bank of Tokyo-Mitsubishi economist Wong Keng Siong.
Retailing has been erratic in wealthy Singapore. Sales climbed a stronger-than-expected 4.4 percent in June from May, when they were also up, after falling in both March and April.
Most economists in a Reuters poll had expected flat sales from June, after adjusting for seasonal patterns.
Total sales rose 8.6 percent in the year to July, weaker than the 14.6 percent expected by most economists and coming off a low base in 2003 when the economy suffered after a deadly outbreak of the Severe Acute Respiratory Syndrome virus.
Clothes and footwear sales were up 42.3 percent from a year earlier, boosted by an annual 8-week shopping fest from late May through July known as the "Great Singapore Sale". But watches and jewellery rose just 0.7 percent.
Food and beverage sales fell 17 percent, the data showed. "The main interest here is why food and beverage came off so sharply," Wong said.
A surge in tourist arrivals to record levels in July also underpinned department store turnover.
The services industry - including retailing and tourism - contributes about 63 percent to Singapore's $95 billion economy, which has posted four quarters of extraordinarily strong growth since rebounding from the effects of last year's Sars outbreak.
Tourist arrivals to Singapore have steadily risen since the Sars outbreak ended. The island city received 802,283 visitors in July, the highest number of monthly arrivals since records began and 48 percent above a year earlier.
The government expects Singapore's economy to grow between 8 percent and 9 percent in 2004, on par with fast-expanding China, before slowing to a 3-5 percent pace in 2005.
Some retailers and analysts are cautious, noting that higher oil prices and slowing growth in major economies could dampen consumption in coming months.
The data showed car sales up 6.3 percent from a year earlier, while supermarket turnover fell 3.7 percent in July from a year earlier, and sales of telecommunication and computer equipment gained 3.4 percent.