Fluctuating retail trade data point to consumers’ uncertainty about the future

According to the data published by the Central Statistical Bureau, the retail turnover in March grew 0.5% month-on-month (seasonally adjusted data at constant prices). The annual growth still continued at the rather high 10.0% (calendar-adjusted data). Owing to the rapid retail turnover growth in January (+5.5%), in the first quarter of 2012, there was a retail turnover quarter-on-quarter growth of 3.4%.

The quarterly growth was most rapid in the trade of household items (furniture, lighting fixtures and other household items) 7.5% over the fourth quarter of 2011.  Despite the substantial rise in fuel prices, its trade turnover has increased by 3.7% -- probably as a result of the more successful measures against the illegal trade in fuel. The retail turnover of food items however, has dropped 0.4%.

The confidence indicators aggregated by the European Commission in the first months of the year have been very uneven. Consumer confidence improved substantially in January and February yet deteriorated to the same degree in March and April. The dynamic of retail trade confidence is similar. That might be explained by the drastically different heating bills: in January the utilities bills were uncharacteristically low for the season whereas in February and March they were back to the usual winter level. The survey question about the personal financial situation of the consumers also points to the importance of this factor–its evaluation has deteriorated since February. It may also be that the confidence of some consumers and traders was ruined by the real estate tax bills. Moreover, one should also take into account the fact that, against the background of European developments, there is much uncertainty regarding both the overall economic developments and the sustainability of one’s personal income in the future.

The retail turnover is likely to continue fluctuating throughout 2012, yet with a slight upward trend that will be determined by a gradual increase in the real salary fund in the economy.