The seasonally adjusted Bloomberg Eurozone Retail Purchasing Managers' Index, or PMI(R), rose sharply in April to a level above the no-change mark of 50.0. This comes after 3 months of sub-50 readings, which signaled falling month-on-month retail sales. The latest PMI indicated that Eurozone retail sales rose solidly at the start of the second quarter.
The PMI registered a new survey high of 54.6, indicating the sharpest growth of retail sales since survey data were first available in January 2004.
Retailers noted that a general improvement in market demand in the Eurozone economy had strengthened consumer confidence and boosted turnover. Higher retail sales volumes were also driven by successful promotional campaigns, although the cost of these also tended to create downward pressure on margins, which continued to fall sharply.
The PMI is a monthly survey indicating economic conditions in the Eurozone retail sector one month ahead of government issued figures.
The higher April retail sales were seen primarily in German and French retail sectors. After falling slightly in March, monthly retail sales in Germany increased markedly - by far the sharpest indicated by the survey to date (59.3). Sales also rose strongly at French retailers (55.2), having declined slightly last month. In Italy, retailers reported that the general election depressed consumer activity, and Italian retail sales declined sharply since March (46.8).
Eurozone retail sales were higher in April compared to a year earlier, the first annual growth in sales since April 2004 (52.1). However, this growth was reported by panelists to be largely a consequence of the earlier Easter period in 2005. Annual sales increased in Germany and France in April, but continued to fall in Italy.
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