Eurozone retail sales bounced in May, figures for its three largest economies showed today, reversing a drop in April.
Germany set the pace, with a solid rise in France and a slower decline than previously in Italy.
The turnaround in retailers’ fortunes spurred increased job creation in the sector, with new employment at a 31-month high.
“Trends were lop-sided”
The data comes from IHS Markit, the financial information company, in its latest purchasing managers’ index (PMI) for eurozone retailing. Surveying purchasing managers in any number of industries has become a tried and tested way of taking the temperature in an industry or sector.
Each PMI report ranks the responses on a scale of one to 100. Should the final total be below 50, that signals contraction in that sector, whereas above 50 signals expansion. 50 itself marks a neutral position.
In May, the eurozone PMI for retailing stood at a three-month high of 51.7, just into expansionary territory. But IHS Markit economist Alex Gill said: “The positive trends were lopsided when looking at country data.
“The rise in monthly sales was driven by a sharp rise in Germany.”
Germany’s PMI reading was 55.5, a 13-month high while that for France was 50.7, a three-month peak. Italy recorded 47.3, its best performance in two months.
Actual sales under-perform plans
Germany was the only country to register a rise in year-on-year sales, “while Italy recorded a marked decline,” - according to IHS Markit.
Actually achieved sales continued to fall short of retailers’ planned targets midway through the second quarter, said the report. “The degree of under-performance was the weakest of the year so far but remained marked overall,” it added.
The report added that a rise in gross margins in Germany was balanced by declines in France and Italy.
A brighter sales picture was good news for jobs in retailing. The report said: “In line with rising sales, eurozone retailers took on additional staff members in May, thereby extending the current period of job creation to 31 months. Moreover the rate of expansion was the most marked over this period.”
Germany, France and Italy are the three biggest economies by far in the single-currency bloc, being the only euro-zone members of the Group of Seven advanced nations. The performance of any business sector in these three dominant economies is a good bell-whether for the wider euro area.