German consumers rushed to reopen their wallets after the lifting of coronavirus lockdowns in May, pushing retail sales in the country up by a record 13.9 per cent from the previous month, according to data published on Wednesday.
The monthly jump was the largest since the start of the data series in 1994, the Federal Statistical Agency said, and sales were 3.8 per cent higher than they were in the same month last year, suggesting that the easing of lockdowns released pent-up demand.
The data are the latest evidence that the German economy is rebounding from its low point when the pandemic was in full force, despite the fact that social-distancing rules remain in place and many large-scale public events are closed. Some economists said they could revise their estimates for the country’s economy upwards as a result.
“Taking advantage of the early reopening of shops, German consumers opened their wallets like never before in May,” said Holger Schmieding, economist at Berenberg. “The German retail sales data point to an upside risk to our forecast.”
The retail rebound was driven by a surge in online and mail-order sales, which rose 28.7 per cent year on year in May. Food retail sales in supermarkets and groceries advanced 4.9 per cent year on year, Destatis said, while sales of furnishings, household appliances and building supplies were up 8.6 per cent.
However, not all sectors benefited; sales of textiles, clothing, shoes and leather goods were down 22.6 per cent from the same period a year ago, while sales of cosmetic, pharmaceutical and medical products fell 6.3 per cent. Month-on-month figures were unavailable at sector level.
Ralph Solveen, economist at Commerzbank, said that if the trend continued in June, “an unchanged turnover could even be reported for the quarter as a whole . . . This would indicate a smaller decline in GDP in Q2 than most analysts currently expect”. However, he cautioned that “retail sales figures are often subject to significant revision”.
France experienced a similar rebound in retail sales in May, its national statistics office said on Tuesday. Consumer spending on goods surged 36.6 per cent, purchases of cars and leather goods more than trebled month on month and sales of household durables such as furniture more than doubled.
But French household spending on goods remains 7.2 per cent below the pre-pandemic level in February, indicating that the economy has some way to go before it returns to a normal level of consumer activity.
Germany’s retail figures came as sentiment surveys in Spain and Italy indicated that the manufacturing downturn had eased sharply after pandemic-related restrictions relaxed.
The IHS manufacturing purchasing managers’ index (PMI) for Italy rose to 47.5 in June from 45.4 in the previous month; for Spain, it rose to 49 in June from 38.3 in the previous month.
A PMI reading of below 50 indicates that the majority of respondents reported a deterioration in conditions, but the figures show that a rising proportion of Spanish and Italian businesses said activity had improved compared with the previous month.
In France, manufacturing activity returned to growth, but companies continued to shed jobs. The final PMI reading showed an increase to 52.3, marginally higher than initial estimates published last week.
“Eurozone factories are seeing a strong initial recovery as the economy lifts from Covid-19 lockdowns,” said Chris Williamson, chief business economist at IHS Markit.
The economic impact of the pandemic is still taking its toll on the German jobs market, according to separate figures published by the Federal Employment Agency on Wednesday, which showed unemployment had risen by 40,000 to a five-year high of 2.85m people in June. That pushed the country’s jobless rate up from 6.1 per cent in May to 6.2 per cent.
However, Germany’s furlough scheme, known as Kurzarbeit, has helped avoid much larger-scale job losses; a further 342,000 people applied to join the scheme in June, taking the total number of applications above 12m.
By April, 6.83m people were receiving Kurzarbeit benefits, the agency said — up from 2.49m in March and well above the 1.5m peak reached by the scheme after the 2008 financial crisis.
Additional reporting by Valentina Romei in London