By Daniel Hunter
The downturn in the Eurozone retail sector gathered momentum at the end of the first quarter, Markit’s retail PMI data for March showed. The rate of decline in sales in the latest period was the fastest since May 2012, and the trend over the first quarter as a whole was the second-weakest since Q1 2009.
The Eurozone Retail PMI is a seasonally adjusted indicator of changes in the value of sales at retailers. Any figure greater than 50.0 signals growth compared with one month earlier.
Commenting on the data, Trevor Balchin, senior economist at Markit and author of the Eurozone Retail PMI, said: “The latest batch of retail PMI data signalled a deepening consumer recession in the Eurozone at the end of the first quarter. The PMI average for Q1 posted 44.7, the fourth-lowest on record and indicating a sixth successive quarterly fall in consumer spending after official data reported a 0.4% decline in the final quarter of 2012.
“France has overtaken Italy as having the worst- performing retail sector of the three largest euro area economies. Sales fell at a survey-record pace, as did employment. Italy registered another steep drop in sales, while German retailers witnessed a flat trend in March.”
Retail PMI data by country signalled steep falls in sales in both France and Italy, and a broadly stable trend in Germany.
In particular, the month-on-month rate of decline in French retail sales accelerated further to a new survey record (data were first collected in January 2004). Moreover, the pace of contraction in France was fractionally faster than that registered in Italy — the first time that France had registered a worse performance than Italy since February 2011. Italian sales continued to fall sharply, but at a weaker rate than the trend shown over 2012.
Measured on a year-on-year basis, Eurozone retail sales declined at a survey-record pace in March. Moreover, the current 22-month sequence of annual declines is one short of the survey-record stretch registered from May 2004 to March 2006. Italy posted the steepest year-on-year fall and Germany the weakest, while the decline in France was a survey record.
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