Bloomberg PMI Signals Further Strong Growth in Europe Retail
New York (ots/PRNewswire) -
The June Bloomberg Eurozone Retail Purchasing Managers' Index ("PMI(R)"), a monthly survey indicating economic conditions in the Eurozone retail sector one month ahead of government issued figures, indicated that Eurozone retail sales rose strongly at the end of the second quarter.
The seasonally adjusted Eurozone Retail PMI remained above the no-change mark of 50.0 in June, signalling month-on-month growth in Eurozone retail sales. Monthly Eurozone retail sales have increased throughout the second quarter, and eight times in the past twelve months. The PMI was down slightly from May's survey high of 56.3 but, at 55.1, indicated the second sharpest rate of expansion in month-on-month retail sales in the two-and-a-half years that survey data have been collected. Retailers stated that positive trading conditions reflected a strengthening of wider demand in the single currency area, while there were reports that sales had been boosted by promotions linked to the football World Cup in Germany, and by good weather. However, improved sales did not lead to growth in margins, as firms continued to face substantial inflationary pressure on their purchasing costs.
The two largest Eurozone economies, Germany and France, registered growth of retail sales in June. French retailers posted the sharpest growth of sales on average, and the rate of expansion accelerated to a record high (60.3). Meanwhile, the rate of growth of German retail sales dipped below the highs seen in April and May but was nevertheless strong (54.7). In Italy, retail sales fell in June for the fifth month running, albeit only slightly (48.9).
A third successive month of growth in annual retail sales in the Eurozone reflected a further improvement in consumer demand in June. As with the trend in month-on-month sales, the rate of growth of yearly retail sales eased since May, but remained strong (54.5).
Margins and Prices
The rate of purchase price inflation signalled by the survey in June was the second highest in thirty months of data collection (59.2). Average list prices at suppliers increased as demand for inputs rose and shortages of raw materials emerged. Purchase price inflation in the German retail sector reflected suppliers raising their charges in advance of January 2007's rise in VAT.
Inflationary pressure on retailers' purchasing costs continued to erode gross margins in June (44.6). The rate of decline in profits picked up to the strongest in four months. While higher purchasing costs were often blamed for the latest fall in profits, firms also referred to sales promotions that had led to lower selling prices.
Although average list prices were up sharply in June, firms continued to expand their purchasing operations in order to meet sales demand (54.8). Though the rate of growth in purchases eased slightly since May it was the third-highest indicated by the survey to date. Higher purchasing was also the result of ongoing stock-building programmes. The overall level of stocks of goods for resale increased for the ninth straight month (54.3).
The Eurozone retail sector workforce expanded for the third month running in June (52.3). Moreover, the rates of job creation during the past two months have been the highest signalled during the survey's two-and-a-half year history.
Sales Against Targets
Though sales rose strongly in June, retailers missed sales targets on average, albeit to the weakest extent for six months (46.6). Retailers remained highly confident that sales targets would be surpassed next month (57.6).
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Notes to editors
The Bloomberg Eurozone Retail PMI is the first monthly report of its kind in Europe, providing businesses, governments, central banks, economists and analysts the most accurate and up to date insights and data into the Eurozone retail sector.
The index, compiled exclusively for Bloomberg by NTC Economics Ltd, questions more than 1,000 retail executives in Germany, France and Italy. These countries together represent approximately 75% of total Eurozone retail sales. National data are weighted together according to each country's contribution to total Eurozone retail sales to form the Bloomberg Eurozone Retail PMI.
The survey tracks changes in retail sales, performance against sales targets, inventories, prices, employment and other key indicators. Data are published approximately one month ahead of government figures.
The Bloomberg Retail PMI report is first published exclusively for Bloomberg users on the BLOOMBERG terminal at 09:00 GMT, followed by a general press release and analysis on Bloomberg Television. July and August data will be released on the following dates:
- July Data: Released 7 August 2006
- August Data: Released 6 September 2006
Web site: http://www.bloomberg.com
ots Originaltext: Bloomberg LP London
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Judith Czelusniak of Bloomberg LP, +1-212-617-4273, or