Day: June 21, 2024

UK retail sales rebounded in May as sales across all sectors recovered after poor weather damped turnover in April, official data revealed on Friday.

The retail sales volume grew 2.9 percent on a monthly basis, offsetting the 1.8 percent fall in April, the Office for National Statistics reported. The growth also exceeded economists’ forecast of 1.5 percent.

Sales, excluding auto fuel, also expanded 2.9 percent after easing 1.4 percent a month ago. Sales were expected to grow 1.3 percent.

Food store sales increased 1.2 percent and auto fuel sales climbed 2.8 percent.

Non-food stores sales advanced 3.5 percent, which was the fastest growth since April 2021, as improved footfall, better weather and promotions boosted sales of clothing and footwear, furniture stores and games and toy stores.

On a yearly basis, retail sales registered a growth of 1.3 percent in May, in contrast to the 2.3 percent decrease in April. The annual decline was worse than economists’ forecast of 0.9 percent drop.

Excluding auto fuel, retail sales moved up unexpectedly by 1.2 percent, reversing the 2.5 percent fall in the prior month. Economists were forecasting a 0.8 percent fall.

With inflation falling back to target and consumer confidence improving, retail sales may well continue to strengthen, Capital Economics’ economist Andrew Wishart said.

British consumer confidence rose slightly in June as consumers became more confident about general economic situation, monthly survey data from the market research group GfK showed Friday.

The consumer sentiment index advanced to -14 in May from -17 in April. The reading was seen at -16.

RTTNews Economic Calendar helps you stay ahead of the curve and is updated in real-time. Get your Economic Calendar today and make data-driven decisions.

The euro area private sector recovery suffered a setback in June as business activity and employment growth softened due to weak orders, preliminary results from the purchasing managers’ survey by S&P Global showed on Friday.

The flash HCOB composite output index fell unexpectedly to 50.8 in June from 52.2 in May. The score was below forecast of 52.5. Nonetheless, a reading above 50.0 indicates expansion.

Although the sector expanded for the fourth straight month, the increase in output was the weakest since March to signal a loss of growth momentum.

Growth was limited to the service sector as improving conditions in the manufacturing sector was reversed in June.

The flash services Purchasing Managers’ Index fell to a three-month low of 52.6 from 53.2 in May. The score was forecast to rise to 53.5.

At 45.6, the manufacturing PMI fell to a six-month low from 47.3 in the previous month. The reading was expected to rise to 48.0.

There was a renewed fall in new orders, which dropped for the first time in four months. That said, the pace of decline was only slight. The decrease in new business from abroad was the sharpest since February, the PMI survey showed.

The rest of the Eurozone registered a further solid rise in activity, despite the rate of growth easing to a four-month low.

In line with the slower growth in business activity, the rate of job creation eased in June. With new orders returning to contraction territory, output was supported by work on outstanding business.

Consequently, backlogs of work continued to be depleted solidly, with the reduction the most marked since February.

The deepening downturn resulted in more pronounced reductions in purchasing activity and holdings of both purchases and finished goods.

Regarding prices, input cost inflation eased for the second straight month to the slowest in the year-to-date period. In line with the picture for input costs, output price inflation eased to an eight-month low.

After having hit a 27-month high in May, business confidence weakened amid the fall in new orders. Optimism was the softest in four months.

The GDP estimate for the second quarter indicates a slight downgrade but still points to positive growth of 0.2 percent compared to the first quarter, Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

Germany showed a third consecutive monthly increase in business activity, but the rate of growth slowed amid a renewed fall in new orders. Meanwhile, the French private sector contracted the most since February.

Germany’s composite output index posted 50.6 in June, down from 52.4 in May and was lower than the forecasted 52.7. The score fell from a 12-month high signaling a noticeable slowdown in the rate of growth.

The services PMI fell to 53.5 in June from 54.2 in the previous month and was lower than the expected 54.4. Likewise, the manufacturing PMI dropped to 43.4 from 45.4. The reading was forecast to rise to 46.4.

France’s private sector contracted on renewed decrease in new orders. The headline HCOB flash composite output index fell unexpectedly to 48.2 in June from 48.9 in May. The score was seen at 49.5.

The flash services PMI posted 48.8, down from 49.3 in the prior month. The reading was expected to rise to 50.0. The manufacturing PMI slid to 45.3 from 46.4 in April. The expected reading was 46.8.

Uncover key Economic Data this week with RTTNews Macroeconomic Calendar

House prices in Germany declined for a sixth consecutive quarter in the first three months of the year, extending the severe slump from last year that was triggered by high interest rates and rising cost.

The residential property price index fell 5.7 percent year-on-year in the first quarter, following a revised 7.2 percent decline in the previous three months, the statistical office Destatis said Friday.

House prices plunged 10.2 percent in the third quarter of 2023, which was the worst fall in the current cycle.

Residential property prices decreased 1.1 percent sequentially in the first quarter.

In the full year 2023, German house prices decreased 8.4 percent, which was the sharpest year-on-year decline since the beginning of the time series in 2000 and the first decline since 2007.

Earlier this month, the European Central Bank cut interest rates for the first time in five years as policymakers were convinced that inflation is finally returning to the 2 percent target. Economists expect the bank to lower rates once again for the rest of the year.

ING economist Carsten Brzeski said the financing conditions remain restrictive despite the ECB rate cut and this will continue to damp housing demand, thus making a strong rebound of the market unlikely.

“The tense situation in the construction sector and the lack of new housing supply should exert upward pressure on prices while also weighing on volumes,” Brzeski said.

“Although demand will continue to recover in the months ahead, a swift return to levels seen prior to the ECB’s interest rate hike cycle is unlikely. It will be a gradual recovery.”

ING expects German house price growth of about 1 percent this year.

A recent survey by the ifo Institute showed that German builders remained pessimistic regarding their business situation in May but were hopeful of better future as they think the worst of the economic downturn is behind them.

Many companies are trying to counteract the order shortage by cutting prices, the ifo said.

The ifo Institute raised the German economic growth forecast for this year to 0.4 percent from 0.2 percent, on Thursday. The think tank retained its prediction for next year at 1.5 percent.

“The German economy is slowly working its way out of the crisis,” ifo said.

Track market moving Economic Events that impact Commodities, Stock, and Forex by using realtime RTTNews Economic Calendar this week.