Italy's retail sales fall in Q2: ISTAT

Retail sales in Italy contracted in terms of volume over the second quarter (Q2) of the year compared to the previous quarter, the country's statistics entity reported Wednesday, as the economy was suffering from rising prices and other areas of uncertainty.

Compared with the first quarter (Q1), retail sales in Q2 were 0.3 percent lower when measured by volume and 1.1 percent higher in terms of value, said the National Institute of Statistics (ISTAT).

In June, retail sales volumes decreased by 3.8 percent compared to a year earlier, recording the first year-on-year fall since February 2021. However, sales increased by 1.4 percent in value in June, due mostly to a broad increase in prices.

The ISTAT's statistics came on the heels of a report from Standard & Poor's Global Market Intelligence, which reported earlier this week that Italy's Manufacturing Purchasing Managers' Index (PMI) fell to 48.5 in July, down from 50.9 in June. It was the first "deterioration" in the key indicator of business conditions since June 2020, the report said.

"Italy's manufacturing sector faced further challenges in July, as the health of the sector deteriorated for the first time since June 2020 amid a renewed fall in factory production and the sharpest drop in new orders since the height of COVID-19 containment measures in April 2020," said Lewis Cooper, an economist from S&P Global Market Intelligence.

In an earlier report, the ISTAT noted that Italy's consumer prices in July were 0.4 percent higher than in June and 7.9 percent higher than a year ago. The upward pressure on prices was due to higher fuel costs stemming from the crisis in Ukraine and other supply-related factors, said the ISTAT.

The ISTAT last week also reported that both business and consumer confidence eroded in July. Consumer confidence fell to 94.8 from 98.3 in June, while business confidence slipped to 110.8 from 113.4.