Retail sales in the euro zone contracted by 0.2% in February, ending four months of growth. However the figure is still 3% higher than that recorded for the same month in 2014.
Sales in France, the eurozone’s second largest economy, showed strong year-on-year growth of 3.9%, even taking into account 0% growth.
In Greece, the retail sales sector grew by 0.3%, lower than forecasted growth in excess of 1%, a possible knock-on effect of the continuing uncertainty surrounding the country’s finances. While this month’s reading ends a negative two month trend, the latest data are the latest which have come in below expectations, thereby further impacting on the government’s tax take.
Some commentators have speculated that the decline may be a sign that the impact of low oil prices on consumer spending is beginning to subside. Yet given the strong trend of the figures in the previous months, it is unlikely that this slight decline will be taken as a strong indicator of sentiment change within the Eurozone.
The negative data is mitigated somewhat by data released earlier this week by Markit, which showed that retail PMI’s had risen to 48.6, the best reading since November 2014.
With unemployment falling across the common currency area and wages beginning to recover, it is expected that consumer spending is likely to continue the improvement seen in recent months.