MILAN, Italy – Global sales of personal luxury goods will rise this year but only moderately, with higher spending in Japan and Europe compensating for flat trends in Asia and the United States, an industry report showed on Tuesday.

The sector — including fashion accessories, homeware, jewellery and watches but not cars, yachts and fine art — will grow no more than two percent this year, according to a study by consultancy group Bain & Co and Italian luxury industry association Altagamma.

Japan is expected to be the fastest growing market for luxury goods this year, with sales seen up five percent, helped by spending from incoming Chinese tourists, the report added.

Sales in China were expected to rebound after three years of decline, but Hong Kong and Macao will struggle to grow.

"Growth year on year is always more restrained but the sector is performing better than almost all the other industrial branches," Altagamma vice president Armando Branchini said in a statement.

A strong dollar and uncertain consumer confidence ahead of presidential elections is expected to weigh on demand for luxury in the United States, while local spending will outweigh a slowdown in tourism in Europe on the back of security threats.

Cosmetics and leather, shoes and accessories will be the best selling product categories this year while so-called hard luxury, represented by jewellery and watches, will not grow.

In coming years, the luxury market is expected to keep expanding at an average annual rate of 2-3 percent, mainly driven by growth in China.

"All eyes are turned towards China, key in guiding the relaunch (of the sector), and on the recovery of the United States, where currently local consumption is not able to counterbalance the absence of tourism spending," Bain and Co partner Claudia D'Arpizio said.

At the end of 2015 the market was up 13 percent to a value of €253 billion (£192 billion). It grew one percent at constant exchange rates.

By Giulia Segreti; editor: William Hardy.