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Economy in Brief

European Retail Sales Rebound in June; New Accession Countries Show Vigorous Trend
by Carol Stone August 4, 2004

Eurostat today reported retail sales indexes for June and May. June's figures for the region as a whole and for various individual countries generally show a rebound after a widespread drop in May. Specifically, the broadest measure, the new "Euro-Zone 25" gained 1.2% in June after falling 1.0% in May. The older Euro-Zone 12 index jumped 1.8% after a steeper 2.2% fall. The seesaw in German sales was a source of the overall swing in both regional performances; France also participated.

At the same time, what is striking about the accompanying graph of the two aggregate retail sales gauges is how very much stronger the Euro-Zone 25 has been than the Euro-12 over the last several years. The larger economies show varying degrees of sluggishness, while stores in the "younger" Central and Eastern European economies have seen much more vigorous consumer buying. The second graph gives an example, as sales at outlets for nonfood goods in Germany are on a protracted downtrend, but those in the neighboring Czech Republic have been climbing consistently.

We can't carry the generalization too far. As indicated in the table below, French retail sales are in fact growing, in the last 12 months nearly as much as those in the Czech Republic. And sales in Slovakia have had a widely erratic pattern for several years. Even so, it appears that many consumers in the former communist areas are busy outfitting wardrobes and outfitting homes, while consumers in more economically mature areas are less exuberant.

% Changes June 2004 May 2004 Apr 2004 Year Ago 2003 2002 2001
Euro-Zone 25 1.2 -1.0 0.9 2.5 1.2 1.7 2.6
Euro-Zone 12 1.8 -2.2 1.4 1.1 0.2 0.1 1.6
Germany 1.9 -2.7 0.1 -2.3 -0.6 -2.0 1.0
France 1.5 -0.8 0.2 1.8 0.8 1.8 2.6
Czech Republic N.A. -0.6 0.6 1.9 3.7 3.6 3.3
Lithuania N.A. -1.9 2.0 10.2 11.1 7.9 2.3
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