Markit’s retail PMIs for January point to continued sluggish growth in Germany but deepening problems in France and Italy


At 51.0 in January, the seasonally adjusted Germany Retail PMI recovered from the eight-month low of 47.6 posted during December. The index has now registered above the 50.0 no-change value in three of the past four months and the latest reading was the highest since June 2012. However, the month-on-month rate of retail sales growth was only marginal, in part reflecting reports by survey respondents of subdued underlying consumer demand at the start of 2013.


The marginal rise in month-on-month retail sales contrasted with a decline on an annual basis registered during January. Latest data pointed to a moderate reduction in like-for-like sales compared with one year earlier, and the pace of contraction was the sharpest since May 2010. Moreover, the index was in negative territory for the first time in nine months.

Actual sales in the German retail sector fell short of initial targets during January, as has been the case in each month since April 2012. Moreover, the degree to which sales were lower than expected was the most marked for one year. Retailers also anticipate that sales will continue to disappoint during the month ahead. (…)

Staffing levels increased in January, thereby extending the current period of expansion to 32 months. That said, the rate of job creation was only marginal and slightly slower than the average over this period.


Latest data pointed to another drop in French retail sales at the start of 2013. Falling for a tenth consecutive month, sales contracted at a solid pace during January. Purchase price inflation remained strong, maintaining pressure on gross margins. Retailers cut their purchasing activity at a sharper rate, leading to a faster decline in inventories of goods for resale. Employment meanwhile fell at the sharpest rate in five months.


The headline Retail PMI® registered 47.0 in January, little-changed from the reading of 46.8 in December. (…) The index measuring sales versus one year ago also pointed to a sharp decrease in the latest survey period. The annual rate of contraction was the most marked since October 2012.

French retailers reported that actual sales came in lower than previously set plans during January. Although substantial, the degree to which targets were missed was less marked than one month previously. Panellists anticipate that February’s sales will be marginally below targets. (…)

Staffing levels at French retailers contracted for a tenth consecutive month in January. The rate of job shedding was solid, having accelerated to the sharpest since August 2012.


January saw a further deterioration in the health of Italy’s retail sector, with decreased sales leading to another round of job cuts. Italian retail sales continued to fall at a sharp monthly rate at the start of the year, as indicated by the seasonally adjusted PMI® posting at 37.5 in January. This extended the current period of contraction to almost two years. (…)


Retailers’ expectations regarding the month-ahead outlook for sales improved from December’s record low in January. That said, firms still generally expect actual sales to remain below levels previously planned for and, in particular, foresee the upcoming general election having a detrimental impact on consumer spending in February. (…)

Businesses on the high street continued to cut jobs during January, adjusting their operating capacity in line with reduced sales activity. The latest decrease in employment was less marked than seen in December, but still solid in the context of historical data.


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