A Setback in Euroland’s Retail Sector

February 28, 2011

Retail purchasing manager survey readings revealed a significant setback in February.  Only readings above 50 constitute expanding activity, and February’s score of 49.9 was 5.9 points less than the reading in October.  Such breaks a string of three consecutive increases and three straight scores above 51.  The end of a cash for auto clunkers program in France was a major culprit.  The French index plunged 13.2 points to 45.2, returning near to October’s 45.0 score.  Germany and Italy suffered much smaller declines, and both of their retail PMI scores were above 50.0 at 54.2 and 50.4, respectively. 

The volume of retail sales failed to rise during any of the final five months of 2010 and posted on-month and on-year drops of 0.6% and 0.9% in December.  Sales in the fourth quarter dropped 2.6% at an annualized rate from their third-quarter level.  Today’s retail purchasing manager reports highlight continuing sluggish retail activity especially outside of Germany and France, and another worrisome sign is an intensification of inflation pressure.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.



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