German retailers record solid growth in December 2017

Retailers of Germany recorded a strong December as sales growth reached an eight-month high. The seasonally adjusted headline retail PMI rose to 55.1 from 54.6. The latest figure suggested a solid month-on-month rise in sales, which the survey’s anecdotal evidence partially attributed to greater spending power among consumers. Sales also rose year-on-year, although the pace of growth was slower than that in November.

Owing to the rise in sales in December, retailers were able to meet their targets in the month. This ended a run seven straight months of underperformance, with April being the only time in 2017 when retailers exceeded their plans. Retailers’ expectations towards future sales performance meanwhile remained positive, in spite the level of confidence having weakened from November’s eight-month high.

Factors expected by survey respondents to support sales in the months ahead included spring weather, rebounding consumer confidence and increasing disposable income. Retailers maintained a preference for higher staffing figures in December, with employment in the sector rising for the third month running and to the greatest degree since June. But in spite the pick-up in job creation at the end of the fourth quarter, the average pace of employment growth across the year as a whole was the lowest seen since 2010.

Meanwhile, average prices paid for goods for resale rose amidst reports of solid pricing power among suppliers, although the pace of inflation eased further from October’s 67-month high.

At 15:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bearish at -63.3562, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 45.0025. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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