In an ominous sign, Italy has suddenly stopped shopping
The chart shows that retail growth has been in a bad way for a while
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Private banks recently put together a rescue package for Italy's failing Monte dei Paschi di Siena bank, whose nonperforming loans threatened to tank the country's financial sector. But the bad news keeps on coming.
Italy's shoppers have stopped going to the shops, according to new retail purchasing managers' index data from IHS Markit:
The dotted red line represents 50, the level at which retailers say they see neither an increase nor a decrease in business. The decline began this year after several months of improving results. The data is worrying because Europe generally had solid growth in 2016 until the UK voted in June to leave the European Union.
“July's decrease in retail sales was the seventh in as many months,” according to Markit. “Moreover, the rate of contraction was sharp. The most frequently cited reason was lower footfall. Measured on a year-on-year basis, sales fell at the fastest rate seen since December 2014.”
The chart shows that retail growth has been in a bad way for a while, but it had recently improved into positive territory. (And the comparable manufacturing and services PMI numbers aren't nearly so bad.) Italy's year-over-year gross-domestic-product growth, however, is only about 1%. The UK's is double that, for comparison. So Italy is a country that has no room to maneuver. As Italian Prime Minister Matteo Renzi said this week, “This is my priority, my dream and my nightmare — every day I think about it. Growth, growth, growth.”
Economies are sometimes rescued by their consumers. When recession hits, consumers will often go into debt or spend down their savings, and the resulting activity — shopping — can restart growth (or at least shave off the rough edges).
But in Italy, where the banking sector is already fragile, shoppers are suddenly MIA, again.
Read more:
• This chart is easy to interpret: It says we're screwed
• How Uber became the world's most valuable startup
• These 4 things could trigger the next crisis in Europe
Read the original article on Business Insider UK. © 2016. Follow Business Insider UK on Twitter.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments