BERLIN: German retail sales rose much more than expected in September, supported by a jump in clothing turnover, data showed on Wednesday, suggesting households made a solid contribution to GDP growth in the third quarter.
Sales rose 2.3 percent in September from the previous month, the Federal Statistics Office said, outstripping the mid-range forecast in a Reuter’s poll of economists for a 0.8 percent gain.
A wider Bundesbank gauge of retail sales, which includes cars and petrol stations, showed turnover was up 1.6 percent on the month in September. For the July to September period, sales were up by 1.2 percent on the central bank’s measure, according to a Reuter’s calculation. “The strong rebound in retail sales excluding cars and petrol in September was indicated by reports of excellent numbers for retail apparel sales, which were helped by the cooler weather,” said Alexander Koch, an economist at UniCredit in Munich. Solid auto sales in the third quarter had helped to underpin spending and pointed to a noticeable contribution to third quarter growth from private consumption, he added.
The Statistics Office is due to publish a preliminary estimate of third quarter gross domestic product (GDP) on Nov. 14 with a detailed breakdown to follow on Nov. 22.
Europe’s biggest economy grew 0.3 percent in the April-June period, after expansion of 0.5 percent in the first quarter of the year.
Koch said he expected growth of 0.6 percent in the third quarter but noted that there were upside risks to the forecast after Wednesday’s strong sales data. For the full year, Koch predicted expansion of 2.7 percent, adjusted for working days.
Substantial risk: Some economists said last month’s jump in retail sales should be treated cautiously and did not necessarily herald a sustained pickup in consumer spending.
“At a first glance the numbers are a positive surprise. But when you look closer you realise the climb is mainly down to clothing. It seems to be a one-off effect,” said Matthias Rubisch at Commerzbank. “Maybe that is due to the bad weather which has encouraged people to go out and buy clothes. So there is a substantial risk that the strong figures will not continue,” he said.
The economy ministry is counting on households taking over from exports as a motor of GDP growth, with consumer spending strengthening as unemployment falls. Recent indicators have been mixed, however, with a survey by the GfK market research group suggesting last week that consumer sentiment will deteriorate in November due to inflation worries.
Germany’s savings rate hit its highest level since the mid-1990s in the first half of 2007, official data showed on Monday, with people putting away 10.9 percent of their incomes. On Tuesday, the Federal Labour Office reported that Germany’s seasonally adjusted unemployment rate had fallen to a 14-year low of 8.7 percent in October.
A survey by the Ifo economic research institute last week showed retailers had felt more positive about the business climate in October, compared with the previous month.
Bernd Weidensteiner at DZ Bank said the September sales data were relatively pleasing but it was important to remember that the monthly figures were very volatile. “In the last few months we had very weak figures so this can be described as a normalisation,” he said. reuter
