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Saturday, 7 January 2012

European consumer confidence and retail trade confidence amid the financial crisis


In the context of the ongoing European financial crisis, this post will look at recent consumer confidence levels across Europe before turning to retail trade confidence levels for Europe including the hard-hit PIGS (Portugal, Italy, Greece, Spain).
Figure 1, below, charts consumer confidence levels across Europe for August and September 2011 as recorded by Eurostat. Only three Nordic countries were showing positive consumer confidence at September 2011 – but two out these three saw a month-on-month decline in confidence from August. Across Europe, only Denmark, Latvia, Poland, Slovenia, Bulgaria, and Cyprus saw month-on-month upticks in September.
Figure 1: Consumer confidence, Europe, Aug-Sep 2011

Note: Confidence levels are the balance of positive and negative responses from consumers to questions on expected developments in households’ financial situation, the economic situation, unemployment, and savings over the next 12 months.
Source: Eurostat
The following graphs focus on retail trade confidence levels as recorded by Eurostat. Retail trade confidence levels are the balance of positive and negative responses from the trade to questions on the present business situation, the assessment of stocks, and the expected business situation.
The figure below charts retail confidence across all the European countries where data is available, for August and September 2011. At September, the highest rates were seen in the Baltics: the high confidence levels seen in Estonia are unsurprising given that country’s recent strong economic growth (real-terms year-on-year GDP growth of +8.4% in Q2 2011).
Figure 2: Retail trade confidence, Europe, Aug-Sep 2011

Source: Eurostat
The figure below charts 12-month data for the PIGS – the struggling southern European economies hardest hit by the current European financial crisis. I would have broadened it to the PIIGS – but there is no retail confidence data for Ireland. Greece has proved most volatile as its fortunes have changed. April 2011 saw renewed fears of a Greek default as the costs of insuring Greek debt reached new highs – and this looks to have triggered a slump in retail confidence. With the Greek bail out agreed in July 2011 confidence increased a little – but declined again thereafter as the subsequent fall out became evident.
Figure 3: Retail trade confidence, PIGS, Oct 2010 – Sep 2011

Source: Eurostat
Finally, the figure below charts the same measure for the more affluent economies of northwestern Europe as well as the EU-27 average. As ever, these economies are major contributors to the bail outs of more profligate countries, whether through the European Financial Stability Facility or the IMF. The general downward trends in retail trade confidence for these territories, and particularly the now deeply negative confidence levels in the UK, do not bode well.
Figure 4: Retail trade confidence, EU-27, UK, Germany, and France, Oct 2010 – Sep 2011

Source: Eurostat
Ref:johnmercerlondon.wordpress.com

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