Friday, July 27, 2012

27/7/2012: Irish Retail Sales June 2012 and 'Confidence Fairy Tales'

Irish Retail sales data is out for June 2012. Here are the updates to charts:

In the above:

  • The volume of retail sales (i.e. excluding price effects) decreased by 0.7% in June 2012 when compared with May 2012 and there was an annual decrease of 5.5%. 
  • If Motor Trades are excluded, the volume of core retail sales decreased by 1.51% in June 2012 when compared with May 2012, while there was also an annual decrease of 1.71% when compared to June 2011.
  • The sectors with the largest month on month volume decreases are Food beverages & Tobacco (-9.7%), Hardware Paints & Glass (-4.8%), Fuel (-3.9%). 
  • A monthly increase was seen in Electrical Goods (2.9%), and in Books, Newspapers and Stationery (2.6%).
  • The value of retail sales decreased by 1.3% in June 2012 when compared with May 2012 and there was an annual decrease of 4.9%. 
  • If Motor Trades are excluded, there was a monthly decrease of 2.08% in the value of retail sales and an annual decrease of 0.95%.
  • Do note two sub-trend lines showing the complete detachment of Consumer Confidence trend from the Retail Sales trend. That (discussed more below) is probably the real illustration of the so-called 'confidence trick' not working in the real world.
Adding a bit more definition to core sales changes:
  • Value of core retail sales (the index I prefer to consider in this environment, as opposed to CSO focus on volume of sales, which tells me preciously nothing about the revenues and employment in the sector) is down 1.57% in June compared to March 2012. 6mo average is now running at 95.4 against previous 6mo average of 95.2. This means that last 12 months we are running below 2010-2011 average of 96.6. 
  • Compared to 2005 levels, we are now 5.72% below in value terms.
  • Volume is down 0.91% on March 2012 level and 6mo MA is now at 98.65 against previous 6mo MA of 99.5 and 2010-2011 average reading of 101.23.
  • Compared to 2005 levels, volume of retail sales is down 2.02%.
  • Despite these deep falls, consumer confidence (I should start calling it La-La-La Index) from the ESRI came in up-beat at 62.3 in June up on 61.0. Relative to March 2012, Consumer Confidence apparently rose 2.81% and y/y June Consumer Confidence is up 10.66%. Wow, things are really hotting up, folks. 6mo MA through June is boisterous 60, up on previous 6mo MA of 56.3 and ahead of 2010-2011 average of 57.3. 
  • Compared to 2005 average, current Consumer Confidence is up 23.06%.
  • To summarize: actual retail sales are down in volume (-2.02%) and value (-5.72%) on 2005 average readings in June 2012, but Consumer Confidence is up 23.06%. 

Unlike ESRI's Consumer Confidence indicator, my own Retail Sales Activity Index posted contraction in June, in line with twin fall-off in retail sales in volumes and value:

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