RETAIL sales in the Eurozone rose by 2.4 per cent in the year to April, the strongest increase in seven years, and a positive indication that consumers in the currency union are beginning to increase their spending.
Of the region’s major economies, France saw the strongest increase, with a 2.3 per cent spending bump. German retailers recorded only a 0.6 per cent hike, and Spanish shops reported a similar 0.8 per cent rise.
Despite the solid improvement in spending, there was probably some effect from the late Easter weekend. The holiday is often an opportunity for shoppers to splurge, and spending rose by 0.4 per cent between March and April.
Given this effect, some economists remain sceptical: “Any improvement in Eurozone consumer spending still seems more likely to be gradual rather than pronounced over the coming months as there are still significant constraints in several countries,” said IHS Global Insight’s Howard Archer.
After accounting for inflation, retail turnover in the euro area is still down by nearly five per cent from pre-crisis levels.
Greek unemployment levels in March were also announced yesterday, with the jobless rate still extremely elevated at 26.8 per cent. The figure slipped from 26.9 per cent in February.
German factories also reported their orders yesterday, with a 3.1 per cent increase between March and April announced. Analysts had expected an increase of only 1.4 per cent, after a drop in March. The jump brings the annual increase in orders to 6.3 per cent.
“Domestic confidence has rebounded after the euro crisis and demand in developed export markets is growing strongly. That should sustain business investment as a growth driver for the German economy. Exports will also grow, although imports are likely to grow faster, supporting the rebalancing, in particular within the Eurozone,” said Christian Schulz of Berenberg.