Retail sales in the Eurozone single currency area grew for the fifth consecutive month in August 2006, although the rate of increase eased compared to July.
The August Bloomberg Eurozone Retail Purchasing Managers' Index, or PMI(R) is a monthly survey indicating economic conditions in the Eurozone retail sector 1 month ahead of government-issued figures. The seasonally adjusted Eurozone Retail PMI remained above the no-change mark of 50.0 - at 52.3 - in August, signaling further month-on-month growth in Eurozone retail sales. The August level pointed to moderate expansion. Bloomberg said anecdotal evidence from survey respondents suggested rising customer activity as underlying sentiment improved. Expanded product ranges were also reported to have boosted sales during in August.
However, the rate of growth in monthly retail sales eased for the third month in a row from May's survey high. In addition, retailers continued to face strong inflationary pressure on purchasing costs, which contributed to further sharp declines in profits in August.
The two largest Eurozone economies registered month-on-month growth in retail sales in August. The stronger rate of expansion was again seen in France (55.1), where retail sales grew more sharply than in Germany (52.1) for the third straight month. Both countries registered weaker increases in sales than last month. The third economy covered by the survey, Italy, registered falling retail sales for the seventh month running (48.7), albeit at a weaker rate than in July.
Retail sales in the single currency area were up on a yearly basis for the fifth successive month in August (53.8). An improved climate of demand in the wider economy was cited by panelists as being the key factor behind the latest annual growth in sales, which was robust and sharper than the rate registered in July. Annual growth in retail sales was strongest in Germany, followed by Italy.
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