Retail sales ended 2013 on a weak note. In December, sales decreased by 0.8% over the month and increased by a modest 1.8% over the year. The outcome was even weaker than our below-consensus forecast.
However, the trend in retail sales remains positive and we see no reason to worry. The monthly outcomes are erratic and up until December retail sales had increased for four consecutive months. In Q4, retail sales increased by 0.8% q/q and by more than 3% over the year.
We expect the positive trend to continue in 2014. Favorable financial conditions in the household sector, such as solid income growth, low inflation and mortgage rates, will continue to support spending in 2014. Consumer confidence is also on an upward trend which should boost willingness to spend.
Details, December
Retail sales, y/y: 1.8 % (Nordea 3.0%, consensus 3.3%, prior 4.3% revised from 4.5%)
Retail sales, m/m: -0.8 % (Nordea -0.5%; cons. 0.5%; prior 1.0%, revised from 0.9%)
Nordea