German retail sales fall more than expected in April
By Michele Maatouk
Date: Wednesday 02 Jun 2021
(Sharecast News) - German retail sales fell much more than expected in April as further Covid-19 restrictions were introduced, according to figures released on Wednesday by Destatis.
Retail sales declined 5.5% on the month following a 7.7% increase the month before, and versus expectations for a 2% drop.
On the year, retail sales were up 4.4% in April following an 11.6% rise in March. Analysts had been expecting a 10.4% increase.
Claus Vistesen and Mel Debono, chief eurozone economist and senior European economist at Pantheon Macroeconomics, said: "This isn't pretty, but it is consistent with weakness in elsewhere at the start of Q2 - mainly in France - in response to new virus restrictions.
"A controversial Federal law - the emergency brake - prescribes that if the number of new infections per 100,000 residents in seven days (7-day incidence) rises above 100 in a city or district for three days in a row, strict lockdowns are imposed. This law was re-invoked at the end of the month.
"Additionally, it is consistent with mean reversion after an 11.2% gain through February and March. Remember also that outliers in the German retail sales data very often are revised; we suspect the April headline will too."
On the bright side, the economists pointed to the fact that new Covid cases fell sharply last month, probably lifting sales in May as many states were taken outside the scope of Federally-prescribed lockdowns.
"We reckon sales will rebound significantly through May and June, by a cumulative 9-to-10%, producing a 4.7% quarter-on-quarter increase in Q2 as a whole," they said.
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