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Friday, October 31, 2008

The Decline In Eurozone Retail Sales Gathers Momentum

The latest Bloomberg Euro-Zone Retail Purchasing Managers' Index, which is based on a mid-month survey of economic conditions in the euro area retail sector, fell from 46.2 in September to 44.3 in October, signaling a drop in euro-zone retail sales for the fifth consecutive month and one of the steepest declines recorded since the survey began five years ago.

The PMI, which provides data one month ahead of government-issued figures, based on a survey of more than 1,000 retail executives in Germany, France and Italy, showed that retailers cut employment at the fastest rate for four years in the face of falling sales and deteriorating profit margins. Also evident was a further easing of price pressures in the retail sector.

Sales fell in Germany, France and Italy as retailers reported the adverse effects of the global financial market turmoil, rising job market insecurity and stretched household budgets:

Italy saw the steepest drop in retail sales of the three countries covered. The rate of decline picked up sharply during the month with the month-on-month decline in the index the largest yet recorded by the Italian survey. The index plunged from 42.8 to 34.8.

Sales also fell in Germany, at the weakest rate of the current five-month sequence. The monthly sales index rose to 46.7, up from 44.6 in September.

Sales in France fell for the first time in four months, and at the weakest rate of the three countries surveyed. The index fell from 50.5 in September to a six-month low of 48.5.

Euro-zone sales remained well down on a year ago in October, with the annual rate of decline gathering pace to the joint-second sharpest seen over the past four years. The year-on-year sales index fell from 43.4 in September to 41.4. The annual rate of contraction in Italy was the second-strongest in the survey history, while more modest declines were seen in both France and Germany.

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