When adjusted for calendar and seasonal variations, the April turnover was in nominal terms 1.3% and in real terms 1.7% smaller than that achieved in March. Compared with the corresponding period of the previous year, retail turnover was in the first four months 2008 in nominal terms 1.6% larger and in real terms 0.9% smaller than that in the first four months of 2007.
What is clear is that retail sales are falling in Germany, and that they have been since 2006. The index of 2006 was 103.8, that for 2007 was 101.5 (a decline year on year of 2.2%), while in April 2008 the index stood at 98.7.
What it might well be worth considering given the declining working age population issue which is soon to lock in in Germany is whether we may not have reached a high point of the retail sales index in 2006 which will simply not be achieved again, in constant price terms. After all, the export driven boom of the last couple of years is certainly not going to be easily repeatable in the near future, and yet during much of this retail sales have continued to fall in real terms.
Having said this, we should never imagine life is entirely a one way street, and we do have quite an interesting and hard to interpret Retail Sales Purchasing Managers Index reading for May (this is a kind of early warning reading).
Having fallen sharply in April, German sales bounced back in May, showing the largest monthly gain since November 2006. The index jumped from 44.6 to 56.6. The turnaround was commonly attributed by panelists to improved sales of seasonal clothing and household goods resulting from improved weather. Looking back at the index, and the data in recent months (not to say years) it is hard to see the May reading as anything more than temporary "bounce" following several months of quite weak readings.
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