The latest Bloomberg Euro-Zone Retail Purchasing Managers' Index (PMI), based on a mid-month survey of economic conditions in the euro area retail sector, indicates a continuing contraction in euro-zone retail sales for the third consecutive month. While the PMI rose to a three-month high during August, at 47.7 it remains below the crucial 50.0 no-change mark.
The PMI, which provides data one month ahead of government-issued figures based on interviews with more than 1000 retail executives in Germany, France, and Italy, suggests that operating conditions remained tough for retailers at the height of the summer holiday period. August marked the sixth time in 2008 that sales have fallen. The latest contraction was largely attributed to continued caution amongst consumers with regard to discretionary spending, given the uncertain economic outlook and their reduced purchasing power at a time of continuing inflationary pressures.
Italian sales continued to fall, extending the current period of decline to a year-and-a-half. A rise in the respective index to a nine-month high of 44.8 from 38.2, pointed to a considerable easing in the rate of contraction.
France continued to register growth. The rate of expansion improved to a three-month high, as highlighted by an increase in the monthly sales index to 53.7, from 51.3.
Annual retail sales were unchanged in Germany.
The PMI showed a sharp fall in autos and fuel sales, while food and drink sales posted gains.
