German consumers rushed to reopen their wallets after the blockages of coronaviruses were lifted in May, boosting retail sales in the country by a record 13.9% from the previous month, according to data released Wednesday.
The monthly jump was the largest since the start of the data series in 1994, said the Federal Statistics Agency, and sales were 3.8% higher than they were the same month l ‘last year, which suggests that the lifting of blockages has released a pent-up demand. .
The data is the latest evidence that the German economy has rebounded from its lowest point when the pandemic was in effect, despite the fact that social distancing rules remain in place and that many large-scale public events are closed. Some economists have said they could revise their estimates for the country’s economy upward.
“Taking advantage of the early reopening of stores, German consumers opened their wallets like never before in May,” said economist Berger Holger Schmieding. “German retail sales data indicate an upside risk to our forecast.”
The retail rebound was boosted by a sharp increase in online and mail-order sales, which increased 28.7% year-on-year in May. Retail sales of food in supermarkets and grocery stores increased 4.9% year-over-year, said Destatis, while sales of furniture, appliances and building materials increased 8.6 %.
However, not all sectors have benefited; sales of textiles, clothing, footwear and leather goods decreased 22.6% compared to the same period last year, while sales of cosmetics, pharmaceuticals and medical products decreased by 6, 3%. Monthly figures were not available at the sector level.
Ralph Solveen, economist at Commerzbank, said that if the trend continued in June, “unchanged sales could even be reported for the quarter as a whole. . . This would indicate a smaller drop in GDP in Q2 than most analysts currently expect. ” However, he warned that “retail sales figures are often subject to a major overhaul.”
France experienced a similar rebound in retail sales in May, its national statistics office announced on Tuesday. Consumer spending on goods increased 36.6%, purchases of cars and leather goods more than tripled month-on-month, and sales of durable goods such as furniture more than doubled.
But French household spending on goods remains 7.2% below the level before the pandemic in February, which indicates that the economy still has a long way to go before returning to a normal level of consumer activity.
Retail sales figures in Germany came in while confidence surveys in Spain and Italy indicated that the slowdown in manufacturing had eased significantly after the easing of pandemic restrictions.
The IHS index of manufacturing purchasing managers (PMI) for Italy rose to 47.5 in June compared to 45.4 the previous month; for Spain, it rose to 49 in June, against 38.3 the previous month. A reading of less than 50 indicates that the majority of respondents reported deteriorating conditions, but the figures show that an increasing proportion of businesses said that activity had improved compared to the previous month.
In France, manufacturing activity has returned to growth, but companies have continued to cut jobs. The final PMI reading showed an increase to 52.3, slightly higher than the initial estimates released last week.
“Eurozone factories are experiencing a strong initial recovery as the economy recedes from the Covid-19 closures,” said Chris Williamson, chief economist at IHS Markit.
The economic impact of the pandemic is still weighing on the German job market, according to separate figures released Wednesday by Destatis, which showed that the number of employed people fell from 209,000 to 44.6 million in May.
However, the country’s short-term leave scheme, Short-term work, helped to avoid job losses on a larger scale; at the height of the crisis, more than 11 million people had applied to access the program.
Additional reporting by Valentina Romei in London
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