Italy May retail PMI drops on unfavourable weather, lower sales

Italy’s May Markit retail purchasing managers’ index dropped owing to unfavourable weather amid lower sales, report published by Markit showed.

The headline seasonally adjusted Markit Italy Retail PMI, which tracks m/m changes in retail sales fell to 45.2, albeit at a slower rate than in April. The index had fallen to 42.6 in April, a 14-month low, data released by Markit showed Monday.

Falling sales contributed to a further increase in the number of goods for resale held in stock at retailers

during May, the fourth month in a row where this has been the case. Moreover, the rate of accumulation accelerated from the modest pace seen in April to the fastest recorded for over five years, the report showed.

Inventories rose for the seventh month in a row despite a drop in retailers’ spending on items for re-sale. Retailers’ gross operating margin also received a set back with the rate of contraction little-changed from that recorded in the preceding survey period. This was attributed to falling sales figure and more discounting.

"Sharply falling gross margins and lower business optimism indicate that the retail sector’s recovery has been knocked backwards since showing some signs of promise late last year," said Phil Smith, Economist, Markit.