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4 May 2016
Eurozone retail sales decline significantly in March - ING
Bert Colijn, Senior Economist at ING, notes that the Eurozone witnessed a decline of -0.5% in its retail sales which is a disappointing end to a strong first quarter for retail trade.
Key Quotes
“Easter came early this year, but not for the Eurozone retail sector as sales declined by 0.5% month-on-month in March. This means that the quarter ended on a weak note for retail, after two strong months at the start of the year. The dip in consumer confidence because of uncertainty about the global economy and higher oil prices is starting to weigh on the strong domestic spending in the Eurozone.
On a quarterly basis, retail sales still came in strong at 0.7% growth q-o-q and these strong retail sales data confirm that the Eurozone’s strong first quarter growth was boosted by strong domestic spending. The continued decline in unemployment is boosting spending power of the European consumer, which translated into higher sales in the beginning of the year.
The March retail sales data are a warning sign that this is unlikely to be the start of a more robust recovery in the Eurozone. While growth has been strong in the first quarter, it seems unlikely that current growth rates will continue to prevail in 2016. Retail sales in April will be hurt by the March Easter dates and the lower consumer confidence and higher oil prices are likely to weigh on consumption in the months ahead. The strength in the labour market is an upside to consumption, but it is unlikely that job creation in the coming months will be strong enough to keep up growth rates of above 0.5%.”
Key Quotes
“Easter came early this year, but not for the Eurozone retail sector as sales declined by 0.5% month-on-month in March. This means that the quarter ended on a weak note for retail, after two strong months at the start of the year. The dip in consumer confidence because of uncertainty about the global economy and higher oil prices is starting to weigh on the strong domestic spending in the Eurozone.
On a quarterly basis, retail sales still came in strong at 0.7% growth q-o-q and these strong retail sales data confirm that the Eurozone’s strong first quarter growth was boosted by strong domestic spending. The continued decline in unemployment is boosting spending power of the European consumer, which translated into higher sales in the beginning of the year.
The March retail sales data are a warning sign that this is unlikely to be the start of a more robust recovery in the Eurozone. While growth has been strong in the first quarter, it seems unlikely that current growth rates will continue to prevail in 2016. Retail sales in April will be hurt by the March Easter dates and the lower consumer confidence and higher oil prices are likely to weigh on consumption in the months ahead. The strength in the labour market is an upside to consumption, but it is unlikely that job creation in the coming months will be strong enough to keep up growth rates of above 0.5%.”