Monday 21 October 2019

Eurozone retail sales rise in rare sign of optimism in bloc

German factory output drop

Good run: footwear sales, which were up 2.7pc, were among the strongest gainers. Stock image
Good run: footwear sales, which were up 2.7pc, were among the strongest gainers. Stock image

David Chance

Eurozone retail sales jumped in November, according to statistics agency Eurostat, posting their second successive month of gains and breaking a recent run of poor economic data from the bloc.

Retail sales in the eurozone rose by 0.6pc in November from October and by 1.1pc in the 12 months, the agency said.

Ireland's data are not due to be released until today.

In a month-on-month comparison, the strongest gainers were for non-food products and for fuel for cars, which rose 1.2pc. Within the non-food category, textiles, clothing and footwear sales rose 2.7pc.

Economic sentiment in Europe has been depressed recently, with Italy in or close to recession, mass protests in France and a hit to German output.

Other data released yesterday however tarnished some of the shine from the positive news on retail sales.

Factory output in Germany, the eurozone's economic powerhouse, fell 1pc in November from October, much more than the 0.4pc drop forecast by economists polled by Reuters.

The fragility of the euro area's economy was underlined recently when inflation fell sharply in December with the headline rate dropping to 1.6pc year-on-year from 1.9pc a month earlier, putting in doubt the European Central Bank's plans to raise interest rates later this year.

Data provider IHS Markit also revised down its estimate of private sector growth in the bloc to a four-year low and economists say that it is now indicating quarterly gross domestic product growth of just 0.2pc, the same pace as in the third quarter of last year.

Investment advisory firm Capital Economics estimates that industrial production has slowed sharply from the around 5pc levels seen in 2017 and put it at just 1pc year-on-year for October.

Globally, the economic outlook has been hit as the sugar rush from tax cuts has now worked its way through the world's largest economy, while China's breakneck pace of growth is also coming to an end.

Irish Independent

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