Yesterday, the Spanish retail data for January 2013 were presented by the Spanish statistical bureau “Instituto Nacional de Estadística” (www.ine.es).
Although the data were not so gruesome as in September or December 2012, the negative trend in Spain still doesn’t come to an end.
Here are the pertinent snips from the INE press release:
- The General Retail Trade Index annual rate at constant prices stands at –9.0%
- The monthly change adjusted for the calendar and seasonal effects stands at 0.9%
- The INE publishes the first Retail Trade Indices in base 2010 and starts the dissemination of said indices adjusted for the calendar and seasonal effects
The General Retail Trade Index annual change at constant prices stood at –9.0% in January, 1.9 points above that registered in December. After adjusting the calendar and seasonal effects, the annual change registered a –10.2% variation, 1.2 points higher than the rate registered in December.
|Spanish Retail Trade Index, January 2011 - January 2013|
Data courtesy of www.ine.es
Click to enlarge
Retail sales, without include the services stations, registered an annual change of –9.1% at constant prices. Breaking down the sales by type of product, we can observe that Food decreased 5.0% and Non-food products dropped 11.6%.
After adjusting the calendar and seasonal effects, all products showed negative rates, as compared with last year.
All distribution classes decreased in sales in January, as compared with the same month of 2012. Large chain stores presented the lowest decrease (–1.7%) and Single retail stores, the greatest drop (–12.9%).
After adjusting the calendar and seasonal effects, all distribution classes presented negative annual rates.
It should not come as a surprise that the Spanish retail sales have been dropping lately. This trend has been going on for at least two years now.
However, it seems that this negative trend gains momentum currently. Since September 2012, the index has never been north of -8.5%, in contrary with the same period in 2011, wherein January showed significantly better results.
What can also be considered worrisome, is that not only non-food shows deteriorating results (-11.6%) in Spain, but also food (-5%). This could be a signal that poverty is lurking among the Spanish population.
Spain is a country where products, like fashion, accessories, personal maintenance articles, food & beverages and (avoidable) expenses, like visits to cafe’s and restaurants are considered very important and something that people will abolish only in a very late stadium of economic hardship. At the risk of generalization, I state that this is a trademark of the especially South-European countries and to a much lesser degree of the Northern European countries.
This year, the Spanish retail industry showed very poor results in January, a month which would normally show considerably better results than the previous months December and November.
This fact could point to the circumstance that the enormous (youth) unemployment in Spain, in combination with the drastic austerity measures by the Rajoy government, finally take their toll from the Spanish population.
Seemingly, the Spaniards decided to save their money, instead of spending it at things that would normally be considered very important. The fact that sales improved slightly in comparison with December is hardly comforting, as this is an annually returning trend.
In my opinion, this Spanish trend shows again that the EU’s current path of austerity, without fundamental, economic stimulus is ‘a road to nowhere’.
The European Council pays lip-service to the idea that the EU should stimulate the economic situation in the countries of the European Union, but it fails hopelessly in the execution of this concept, for instance by stimulating innovation and education.
Instead, the council aims mainly at ‘improving the balance sheets of the Euro-countries’, through mindless austerity programs that impoverish the citizens in the EU countries. This should bring ‘the holy grail’ – all countries with a budget deficit that remains well within the 3% budget threshold of the Stability and Growth Pact – much closer, but in reality it brings many Euro-zone countries and the citizens that live in them to their knees.
At the same time, the silence concerning well-considered and thorough economic stimulus programs, is deafening. Programs that spur subjects, like:
- innovation and education;
- the introduction of new and state-of-the-art technology within the whole European Union in order to spur well-paid hi-tech jobs;
- improvement of effectivity and efficiency in order to better compete with the low-wage countries;
- a fairer division of prosperity among the countries of the European Union,
must all work with budgets that could be considered ‘insulting’.
Instead, countries like Great Britain, Germany and The Netherlands have been bargaining about paying less to the EU, as if their whole countries depends on this. In their opinion, the EU ("Brussels") does everything wrong and must be punished with less money and less budget. The budget that remains for the EU will subsequently be squandered on the pet topics of countries like France: agricultural subsidies and structure funds for projects that little people really need, but that bring prestige to local officials.
My message to these people: if WE ALL don’t start with doing something about the integral European economy, then the situation in the PIIGS countries (Portugal, Italy, Ireland, Greece and Spain) and the East-European countries could deteriorate quickly in the near future. That is, when the crisis not suddenly vanishes, like everybody and their sister seem to hope(!).
Before economies start to become healthier, the people within these economies must first start with feeling more optimistically. Such a feeling never came from mindless austerity measures alone; that is one thing that is for sure.