Bloomberg Retail PMI Signals Second-Sharpest Sales Decline
Jul 1, 2008
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The latest Bloomberg Eurozone Retail Purchasing Managers' Index fell from 53.1 in May to 44.0 in June. The PMI provides data one month ahead of government issued figures and the steep drop to well below the 50.0 no-change level indicated that European retail sales fell sharply at the end of Q2, posting the second-fastest rate of decline in the survey's four-and-a-half year history and exceeded by April's record fall. Sales fell in all three of the largest euro countries in June: Italian sales showed by far the strongest rate of decline of the three countries and have underperformed the Eurozone average throughout the first half of 2008 by a wide margin. The month-on-month sales index fell from 38.8 in May to 36.3. Falling sales were linked to low consumer confidence and reduced spending power due to the economic slump and high fuel and food prices. German sales also fell markedly, a reverse from the sharp rise posted in May. The index slumped from May's 18-month peak of 56.6 to 44.9. French retail sales showed the slowest rate of decline among the three countries covered, but this was still in marked contrast to the substantial increase recorded in May. The index fell sharply from May's 23-month high of 59.6 to 48.7 Sales of clothing & footwear, household goods, and autos and fuel all fell well below levels of a year ago, with the latter seeing the sharpest decline. Retailers' optimism about beating targets in the coming month moderated in June. The expectations index eased down from 56.9 to 52.4. French retailers were the most confident about beating targets while, in Italy, expectations were for targets to be exceeded by a narrow margin. In contrast, German retailers expect to miss targets for the first time in five months. Sales are expected to beat targets across all product sectors in June, except household goods.

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