- Chris Williamson, chief economist at Markit
Euro zone retail sales came out weaker than expected in March, turning negative when measured on a monthly basis for the first time since September last year. According to Eurostat, retail sales in the 19 countries dropped 0.8% month-on-month translating into a 1.6% year-on-year increase. Economists, however, had expected a 0.7% monthly decline and a 2.4% annual rise. The biggest downside contributor appeared to be a 2.7% monthly drop in the volume of automotive fuel, followed by a 0.8% decrease in the volume of sales of non-food items. Measured on an annual basis, a 0.7% drop in petrol sales partially offset a 3% increase in the sales of non-food products. Retail sales in the Euro zone's number one economy Germany plunged 2.3% on a monthly basis in March and slid 0.3% in the second biggest economy, France.
Meanwhile, a separate report showed business activity in the Euro zone's services sector slowed in April, but the corresponding index remained comfortably above the threshold, which separates contraction from expansion. The final reading came in at 54.1 points in the measured month, compared with 54.2 a month ago. The preliminary survey showed a 53.7 result. Moreover, Markit's composite PMI, a measure of activity in the manufacturing and services sectors, came in at 53.9 in April, up from the 54.0 booked in the previous month.
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