The Road to Recovery
Published on Dec 3 2010 2:35 PM in Retail
Even accounting for a boost from festive trading, there are signs that retail conditions are improving across Europe, with the latest retail PMI (Purchasing Managers‚Äô Index) data from Markit signalling that sales rose on a monthly basis for the first time since July, moving above the ‚Äėno-change‚Äô mark to 51.3, up from 48.9.
France and Germany seem to be spearheading this recovery, with retail sales growing for the second month in a row in Germany, and the rate of expansion sharpening in the country. Italy, however, recorded the steepest fall in sales since July, a sign that some European countries still have a long way to go. Sales in Italy have fallen continuously on a monthly basis since February.
‚ÄúThe latest figures provide further evidence of a two-speed recovery in the Eurozone,‚ÄĚ Trevor Balchin, senior economist at Markit and author of the Eurozone Retail PMI explained. ‚ÄúRetailers in Germany and France continued to outperform those in Italy, which has posted the lowest retail PMI among the ‚ÄėBig-3‚Äô eight times in the past 9 months.‚ÄĚ
While growth is returning to the sector on average, this has not translated into any surge in employment figures, as retail employment fell marginally in November, following four months of modest growth. Again, Germany and France performed strongest in terms of new job creation, while Italy saw retailers shed staff.
Germany‚Äôs growth is unsurprising, after a separate report found that business confidence in the country has risen for the sixth month in a row, to reach an all time high since reunification. The Ifo Business Climate Index, based on conditions at 7,000 firms across Germany, climbed to 109.3 in November, up from 107.6 in the previous month. ‚ÄúWith private consumption picking up and industrial production being stable, the German economy will remain the economic powerhouse of the eurozone,‚ÄĚ commented one analyst.But will a German recovery be enough to save the European retail market? (3 Dec)
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