HONG KONG - Hong Kong's retail sales fell 4% in November, the smallest decline since May 2019 and the second consecutive month of single-digit drop, showing further signs of bottoming after coronavirus restrictions hit spending and tourism in the global financial hub.

The drop compared with a revised 8.7% decline in October.

A government spokesman said a narrower decline in retail sales was mainly due to an increase in sales of consumer durable goods at retail outlets.

"As inbound tourism remains at a standstill, and the fourth wave of the local epidemic has weighed on local consumption sentiment since the latter part of November, the business environment of the retail trade will remain challenging in the near term," the spokesman added.

November's sales plummeted from a year earlier to HK$28.7 billion ($3.70 billion), government data showed on Monday, falling for the 22nd consecutive month.

In volume terms, retail sales slumped 4.7%, compared with a revised 9.2% fall in the previous month. It was the second straight month of a single-digit decline.

It was the best month since May 2019 when the retail sales was down 1.4% in value terms and dropped 1.8% in volume terms.

For the first 11 months of 2020, the value of total retail sales fell 25.3%, and 26.6% by volume, from the corresponding 2019 period.

Hong Kong's economy shrank 3.5% in the third quarter compared with a year earlier as the coronavirus pandemic hammered consumer spending, trade and tourism. 

The financial hub saw a spike in the number of cases at the end of November which prompted authorities to once again shut down dining in restaurants after 6pm and close gyms and beauty salons. The measures will be in place until at least Jan. 6. 

Last month, leader Carrie Lam had urged residents to stay at home and avoid unnecessary family gatherings as the global financial hub scrambles to contain a rise in coronavirus cases.

Hong Kong banned all flights arriving from the United Kingdom days before Christmas after a new super-virulent strain of the novel coronavirus was identified in Britain.

The city's tourist arrivals in November plunged 99.8% from a year earlier to about 6,000 visitors, the tourism board said, compared with a drop of 99.8% in October.

Sales of jewellery, watches, clocks and valuable gifts, which depend heavily on mainland tourists, fell 16.1% in November versus a revised 26.8% plunge in October. Consumer durable goods rose 21.3%, compared to a 14.6% drop in October.

($1 = 7.7522 Hong Kong dollars)

(Reporting by Donny Kwok and Twinnie Siu; Editing by Bernadette Baum) ((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters Messaging: donny.kwok.reuters.com@reuters.net))