German retail PMI falls below 50 for first time in 14 months

Markit’s seasonally adjusted retail purchasing managers’ index fell from 52.4 in October to 49.6 last month, the first time in 14 months the index has fallen under the 50 threshold that indicates no change.

However, the rate of decline was only fractional overall, Markit added, indicating some of the firms surveyed attribute the fall to unusually warm weather and to the Volkswagen emissions scandal.

Despite monthly sales declining, German retailers raised their input buying activity further during November, while inventories rose for the fourth consecutive month and gross operating margins decreased.

Meanwhile, the number of people employed by German retailers rose in November, continuing a trend that started six-and-a-half years ago.

Markit’s economist Oliver Kolodseike described the figures as disappointing.

“Although indicative of only a marginal decline, like-for-like sales fell for the first time since September of last year, thereby putting a dampener on hopes that the sector remained in good shape as we move towards the end of the year,” he said.

“However, it is too early to say whether the fractional drop in sales was an outlier or whether November’s survey results are the start of a downturn.”