Retail sales in the Eurozone were unchanged on
the month in June, the latest PMI (purchasing managers' index) data from Markit showed. There were marked
differences in country-level trends, meanwhile, with a sharp and accelerated
increase in sales in Germany contrasting with a renewed decline in France and a
deeper downturn in Italy.
The Markit Eurozone Retail PMI - - which tracks
month-on-month changes in like-for-like retail sales - - read 50.0 in June,
little-changed from May’s 49.9 and indicative of a flat trend in sales. Compared
to the situation one year earlier, trade was down moderately during June,
according to firms.
Commenting on the data, Phil Smith, economist at Markit,
which compiles the Eurozone Retail PMI survey, said:
"The latest retail PMI data show a flat trend in
Eurozone retail sales forming, a relative positive in the context of the recent
prolonged downturn. The stagnation hides a growing divergence in country-level
performance, however. The gap between Germany’s headline retail PMI and the
average of those for France and Italy has increased throughout the second
quarter to the widest for almost a year. Any hopes that consumer spending in
France and Italy had turned the corner are looking a little premature."
Eurozone retail sales were supported by continued growth in Germany,
where trade rose sharply on the month and to the greatest extent for almost
three-and-a-half years. In stark contrast, France’s retail sector showed
renewed weakness as sales there fell solidly, offsetting back-to-back marginal
increases in the first two months of the quarter. Moreover, June’s decrease was
the sharpest so far in 2014. A deepening downturn was meanwhile seen in Italy,
where the rate of decline in sales accelerated for the second straight month to
the fastest since February.
At the aggregate level, retailers’
purchasing activity followed the trend in
sales and was unchanged in June after a fractional decrease mid-quarter.
Stocks of items for resale
meanwhile rose for the seventh straight month, and at the fastest rate since
April 2011. This was largely due to sales being markedly lower than targets on
Despite the stagnation in sales in the Eurozone, retail
rose for the first time in ten months. The
rate of job creation was only marginal, however, with recruitment activity in
Germany largely negated by continued staff shedding in both Italy and France.
June data meanwhile pointed to an uptick in the rate of
wholesale price inflation
facing retailers in the euro area, marking the first acceleration in cost
inflation since the start of the year. Accordingly, data showed a firmer squeeze
on gross margins, which
deteriorated to the greatest extent since last November.
outlook for sales*
remained positive, although the degree of confidence weakened further from
March’s recent high to a five-month low.
are asked whether they expect next month’s sales to be higher, lower or the same
For the Retail PMI, Markit has recruited a
representative panel of retail companies in France, Germany and Italy. Together,
these three countries account for approximately 62% of total Eurozone retail
sales by value.