MADRID (Reuters) – Retail sales in Spain rose in November in a tentative sign that domestic demand is picking up after three years of belt-tightening.
Retail sales grew 1.9 percent year-on-year on a calendar-adjusted basis in November, the National Statistics Institute (INE) said on Monday, after falling 0.3 percent in October.
Economists are closely watching to see if retail spending turns consistently positive since strong consumer spending fuelled Spain’s more-than-decade long boom which ended in early 2008.
Spain’s economy emerged from a recession in the third quarter, with miniscule expansion driven mostly by exports. Growth is expected to remain sluggish next year and unemployment remains high at more than 26 percent.
Although retail sales grew 2.1 percent in September, much of the improvement was due to a rise in value added tax (VAT) in September 2012, which hit consumer spending hard, and the October slippage this year suggested demand was still tepid.
Sales of food, personal items and household items all rose in November compared with the same month last year, and all kinds of retailers, from small chains to large-format stores, saw stronger sales, INE reported.
“It’s another positive sign but this isn’t yet a trend,” said Natalia Aguirre of brokerage Renta 4.
Consumer confidence hit its highest level in November since late 2011, according to a poll by the state-run polling firm CIS and retailers took on more staff for Christmas than last year, expecting greater spending.
(Reporting by Sarah Morris and Jesus Aguado; Editing by Fiona Ortiz)
Spain November retail sales jump, recovery still tentative
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