RETAIL trade in the Eurozone dipped by 0.5 per cent during June, according to the EU’s official statisticians, and is now down 0.9 per cent from the same month last year.
Eurostat released the figures yesterday, showing that June marked the largest monthly contraction seen so far this year. The previous significant drop was seen in December. In May, sales had grown by 1.1 per cent.
Even Germany, usually the most buoyant of the euro area economies, saw a decline from the previous year, with total retail trade falling by 1.5 per cent from May, and dipping by 0.4 per cent on an annual basis.
The Spanish economy saw a colossal decline in the volume of retail trade over the year, down 6.9 per cent in comparison to 12 months earlier, the largest fall of any country by some distance.
Jonathan Loynes, chief European economist for Capital Economics, said the figures poured some cold water on the talk of an oncoming recovery for the region. Loynes said: “While the Eurozone economy appears to be on the brink of renewed growth, expansion rates look likely to remain a long way short of those required to address the peripheral countries’ deep-seated economic and fiscal problems and hence bring the region’s debt crisis to a definitive end”.
However, the trend of declining retail volumes was bucked in France, which surprised analysts with 0.6 per cent growth from May. This means that across the year, French retail volumes have grown by 0.4 per cent, despite the country’s recession.
The International Monetary Fund (IMF) also updated their outlook for France yesterday. Despite the comparatively decent performance of the country’s retail sector, the fund noted a number of factors which would limit long-term growth, such as rigid labour markets and reduced competitiveness.
The report maintained that France was unlikely to see GDP growth this year, predicting a 0.2 per cent contraction overall, but expects growth of 0.8 per cent in 2014.
Despite the fall in Eurozone retail figures, Emily Nicol of Daiwa Capital Market suggested that they would soon begin to improve: “Given the rise in consumer confidence to a 23 month high in July, as well as the firmer-than-expected PMIs, we expect the underlying improvement in retail sales to have continued at the start of the third quarter”.