Retail recovery offsets dismal turnout in construction sector

Retail sales registered the fastest growth in over two years.

The recovery in Singapore's retail sector is one of the reasons why the country's economy is seen to recover, countering the dismal state of the construction sector.

According to Diana del Rosario, an economist from Deutsche Bank Research, the number construction contracts awarded declined sharply in April and May.

"It may take at least six more months before our expected bottoming out in residential property prices (to rise 5% at most this year) leads to a pickup in construction activity," del Rosario said.

This is a different picture compared to the retail sector, which appears to have bottomed out in February, gaining pace to grow close to 3% YoY in value and volume terms in March and April.

"Excluding motor vehicles, retail sales (volume and value) accelerated to 5% YoY in April, the fastest growth in over two years, on the back of considerably stronger sales of watches and jewelry, whilst sales of department stores, petrol service stations, medical goods & toiletries, apparel & footwear, recreational goods, and telecom & computers also gained pace," the economist said.

The sector was also given a shot in the arm by the buoyant tourist arrivals, which recorded 5% YoY growth in March and April as against 3% YoY in the first two months of 2017.