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German retail sales climb for fifth year running in 2014
[BERLIN] German retail sales increased for a fifth consecutive year in 2014, rising by 1.4 per cent in real terms, data showed on Friday, reflecting the buoyant mood among consumers in Europe's largest economy.
German consumer morale held up well last year as shoppers benefited from a robust labour market, rising wages and low inflation. Private consumption helped drive a 1.5 per cent increase in gross domestic product.
In December, retail sales rose by 0.2 per cent on the month in real terms after climbing strongly in October and November.
"Average monthly retail sales in Q4 rose by a whopping 1.6 per cent over the Q3 average, suggesting that consumption made a major contribution to GDP growth in Q4," said Christian Schulz, senior economist at Berenberg Bank.
German retail sales posted their biggest yearly increase in 2-1/2 years in December, climbing by 4.0 per cent. That was helped by an extra shopping day compared with the same month in 2013.
The indicator is notoriously volatile, however, and figures are often revised the following month.
Private consumption is expected to boost growth this year too, especially as consumers benefit from cheaper oil.
On Wednesday, a survey showed sentiment among shoppers surging to its highest level in more than 13 years heading into February as lower oil prices meant consumers in Europe's largest economy had more spare cash.
"We expect consumption to continue to be a pillar of growth in 2015, although the upswing in investment heralded by rising business confidence points to business investment as another key driver," said Mr Schulz.
Data on Thursday showed Spanish retail sales jumping by 6.5 per cent year-on-year in December, the biggest increase since 2003, as falling oil prices and an improving economic outlook encouraged Spaniards to spend.