Download Macro Scorecard for Largest Economies

MACROECONOMIC SCORECARD:
THE WORLD’S LARGEST ECONOMIES
Presented by:
Doug Hermanson
Economist
March 2013
Current Retail Conditions
Clear deterioration in Europe; China and U.S. a bit mixed
Summary of Macro Factors Affecting Retail*
Q4 2012 or Latest Available Month*
World's Largest Economies
China
Indicators
Economic Bloc
Euro
United
EU
Japan
Zone
States
GDP, Annualized Growth Rate*
Residential & Business Investment*
Consumer Spending*
Retail Sales
Consumer Confidence
CPI Headline Index
CPI Food Index
CPI Core Index
█ = IMPROVING █ = MIXED █ = WORSENING
2
* GDP, Investment and Consumer Spending are quarterly through fourth quarter of 2012; Remaining
indicators are monthly through January, February or March 2013
• Euro zone and EU
declining sharply;
inflation may loom
with easy money,
weak currency
• China balancing
strong growth vs.
inflation pressures
• U.S. positive in
some measures,
but gov’t issues
have tripped up
confidence
© Copyright 2013 Kantar Retail
Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Commerce, Conference Board, and Kantar Retail
2
The Global Macro Outlook for Retail
Threatened by recession and weak growth into 2013
• Europe will remain in
recession in 2013
• China and emerging
markets follow mixed
path, shifting positive
• The United States will
sustain slow to modest
growth
• As global demand
revives beyond 2013,
global commodity price
pressure will re-emerge
Source: Kantar Retail
China
Europe
Japan
United
States
Short Term
(6–12 months)
Long Term
(2–5 years)
Healthy growth likely to
persist, but at risk of reigniting inflation pressures
Persisting recession
conditions with uncertain
path toward growth
Uneven growth amid weak
export demand, & despite
aggressive monetary
policy to spur growth
Weakness/threats offset
by persisting gains in
housing, investment, hiring
Long-term growth unlikely
to be as robust as past
amid price/cost pressures
Growth likely kept
stagnant by austerity and
lack of confidence
Growth kept modest by
various factors, including
aging population
Growth kept modest by
constraints on income
growth, price pressures
Modest global growth
Moderate growth
Net
likely; downside risks most tempered by persisting
Outlook
apparent in Europe
inflation, austerity effects
© Copyright 2013 Kantar Retail
3
Summary Conclusions and Implications
• Short vs. Long Term. Expect retail demand to remain on a
modest and uneven path in the short term. When global growth
shifts into a higher gear will be determined by the euro debt
crisis and emerging markets, likely in 2014 or beyond.
• Europe. Expect flat or negative growth in most countries
through at least 2013 due to the escalating euro debt crisis.
• China/Emerging Markets. A quick return to robust growth in
China and other emerging markets is unlikely.
• United States. Expect U.S. retail sales growth to keep a
respectable pace, but a notch below last year.
• Prices/Costs. Plan on global cost pressures that remain
relatively modest for most markets in 2013 as a result of
moderate global demand growth in the short term.
© Copyright 2013 Kantar Retail
4
Largest Markets: GDP Trends Span Big Range
Growth is holding up in China; declining in Europe
• Euro zone and EU
pressured by fall
off in investment
Largest Economies: Inflation-Adjusted GDP
Qtr-to-Qtr Growth, Seasonally-Adjusted Annualized Rate
8.2% 8.7% 8.2%
2012.2
• Underlying U.S.
growth trends
stronger than
indicated
• Growth in Japan
is elusive
• China is sustaining
healthy growth
despite threats
2012.3
2012.4
3.1%
1.3%
0.4%
0.4%
-0.2%
-0.9%
-0.3%
-0.7%
-0.7%
-1.9%
0.0%
-2.3%
European Euro Zone**
Union*
United
States
Japan
China***
*European Union includes 27 countries
**Euro zone includes 17 countries
*** Calculated by annualizing quarterly growth rate reported by National Bureau of Statistics of China
Source: EuroStat, China National Bureau of Statistics and Kantar Retail
© Copyright 2013 Kantar Retail
5
Largest Markets: Little Momentum in Retail Sales
Trends in U.S and China still portend sustained global growth
Largest Economies: Nominal Retail Sales
• Euro zone and EU
have fallen flat
Year-to-Year Percent Change; Not Adjusted for Inflation*
20%
• U.S. growth holds
at modest pace
• Japan trending
with flat price
growth
17%
China
14%
11%
8%
United States
5%
• Renewed letup in
China is concern;
unlikely to persist
given consumer
confidence
2%
-1%Mar-11
European Union**
Mar-12
Euro zone***
Japan
-4%
* United States , Japan and China are through February Others are through January
** European Union includes 27 countries
*** Euro zone includes 17 countries
© Copyright 2013 Kantar Retail
Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Labor
6
Largest Markets: Price Pressures Mostly Easing
Pockets of stronger inflation in China and United States
• Weather-affected
commodities have
pushed Chinese
food prices higher
Largest Economies: Consumer Price Inflation
Year-to-Year Percent Change, Through February*
21%
18%
15%
• U.S. inflation
mostly dormant;
elevated gasoline
prices an issue
• Inflation pressures
easing in Europe
and Japan; Easy
money policies
may change this
12%
9%
China
6%
3%
0%
Mar-11
-3%
European
Union**
Euro zone***
Mar-12
United States
Japan
* Through February except the Japan is through January
** European Union includes 27 countries
*** Euro zone includes 17 countries
© Copyright 2013 Kantar Retail
Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Labor
7
Largest Markets: Core Inflation Dormant
Excluding food and fuel, little inflation in other categories
• All the major
markets have core
inflation rates at or
below 2.0%
Largest Economies: Core Consumer Price Inflation
Year-to-Year Percent Change, Through February*
21%
18%
15%
• China’s core rate
is surprisingly
more modest than
in United States
• Japan’s rate once
again declining,
triggering easy
money policies to
spur inflation
12%
9%
6%
3%
0%
Jan-11
-3%
China
European Union**
United
States
Euro zone***
Jan-12
Japan
* Through November, except the Japan is through October
** European Union includes 27 countries
*** Euro zone includes 17 countries
© Copyright 2013 Kantar Retail
Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Labor
8
Largest Markets: Confidence Metrics Mixed
Weak in Europe; picking up in China, Japan; volatile in U.S.
Largest Economies: Consumer Confidence
• China most positive
• Expectations for
aggressive growth
policies may be
boosting Japan’s
confidence
• Confidence in
Europe is holding
at very weak levels
• U.S. plagued by
uncertainty around
government budget
Year-to-Year Percent Change, through February*
15
100
China
10
5
80
United States
0
-5
60
-10
Japan
40
-15
-20
20
Euro zone*** (right scale)
European Union** (right scale)
0
Apr-11
-25
-30
-35
Apr-12
* Through February, except the United States through March
** European Union includes 27 countries
*** Euro zone includes 17 countries
© Copyright 2013 Kantar Retail
Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Labor
9
Scorecard: European Union and Euro Zone
• The euro area hurt
most by Spain and
Italy, but France and
Germany increasingly
a negative factor
1
• EU indicators are
similar due to a
renewed decline in the
United Kingdom
• Easing inflation may
soften declines in unitdemand—but weak
currency raises
inflation threat
The Largest Economies: Selected Indicators
█ = IMPROVING █ = MIXED █ = WORSENING
European Union
2
GDP (Inflation-Adjusted), Annualized Growth Rate
Residential & Business Investment (Inflation-Adjusted)
Consumer Spending (Inflation-Adjusted)
Retail Sales Excluding Auto & Fuel Channels 1
Consumer Confidence (Points) 1
CPI Headline Index, Not Seasonally Adjusted (NSA)
CPI Food Index, Not Seasonally Adjusted (NSA)
CPI Core Index, excluding food and fuel (NSA)
Period
Y-to-Y
Q4 '12
Q4 '12
Q4 '12
Jan-13
Feb-13
Feb-13
Feb-13
Feb-13
-0.6%
-3.5%
-0.7%
-0.1%
-2.8
2.0%
3.2%
1.4%
Period
Y-to-Y
Q4 '12
Q4 '12
Q4 '12
Jan-13
Feb-13
Feb-13
Feb-13
Feb-13
-0.9%
-4.9%
-1.2%
-0.7%
-2.8
1.8%
2.7%
1.3%
Euro Area
GDP (Inflation-Adjusted), Annualized Growth Rate
Residential & Business Investment (Inflation-Adjusted)
Consumer Spending (Inflation-Adjusted)
Retail Sales Excluding Auto & Fuel Channels 1
Consumer Confidence (Points) 1
CPI Headline Index, Not Seasonally Adjusted (NSA)
CPI Food Index, Not Seasonally Adjusted (NSA)
CPI Core Index, excluding food and fuel (NSA)
Growth
Q-to-Q or Chg Chg Q-to-Q
M-to-M Y-to-Y or M-to-M
-1.9%
-0.2%
-2.4%
-3.4%
-0.3%
-0.6%
-1.0%
0.2%
-0.8%
0.2%
0.2%
0.6%
0.8
0.9
0.8
0.4%
-0.1%
1.2%
0.2%
-0.6%
-0.6%
0.3%
-0.1%
1.8%
Growth
Q-to-Q or Chg Chg Q-to-Q
M-to-M Y-to-Y or M-to-M
-2.3%
-0.3%
-2.1%
-4.4%
-0.6%
-1.4%
-1.6%
0.3%
-1.2%
0.2%
0.3%
0.7%
0.5
0.9
0.7
0.4%
-0.1%
1.4%
0.1%
-0.5%
-0.4%
0.3%
-0.1%
2.1%
1
A three-month moving average is used to smooth out volatility in consumer confidence
and retail sales
2 Consumer spending (inflation-adjusted) is estimated by Kantar Retail
Y-to-Y = Year-over-Year change; Q-to-Q = change from prior quarter; M-to-M = change
from prior month.
Chg Y-to-Y = rate of Year-over-Year change in percentage points; Same for quarterly
and monthly growth.
All data is seasonally adjusted unless indicated by "NSA" or Not Seasonally Adjusted
© Copyright 2013 Kantar Retail
Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Commerce, Conference Board, and Kantar Retail
10
Scorecard: China, Japan, and United States
• Japan is struggling to
maintain growth amid
weak global demand
1
• China still faces tough
task to sustain strong
growth without
causing more inflation
• U.S. positive in some
key measures, but
tax/spend issues
have tripped up
confidence
1
A three-month moving average is used to smooth out
volatility in consumer confidence and retail sales
2 China’s consumer spending is estimated by Kantar Retail
The Largest Economies: Selected Indicators
█ = IMPROVING █ = MIXED █ = WORSENING
United States
2
GDP (Inflation-Adjusted), Annualized Growth Rate
Residential & Business Investment (Inflation-Adjusted)
Consumer Spending (Inflation-Adjusted)
Retail Sales Excluding Auto & Fuel Channels 1
Consumer Confidence (Points) 1
CPI (Headline Index)
CPI Food Index
CPI (Core Index, excluding food and fuel)
Period
Y-to-Y
Q4 '12
Q4 '12
Q4 '12
Feb-13
Mar-13
Feb-13
Feb-13
Feb-13
1.7%
7.2%
1.8%
4.1%
-5.5
2.0%
1.2%
2.0%
Period
Y-to-Y
Q4 '12
Q4 '12
Q4 '12
Feb-13
Feb-13
Jan-13
Jan-13
Jan-13
0.4%
0.1%
1.1%
-0.6%
2.7
-0.3%
-0.7%
-0.7%
Period
Y-to-Y
Q4 '12
Feb-13
Feb-13
Feb-13
Feb-13
Feb-13
Feb-13
Feb-13
7.8%
21.2%
11.3%
13.3%
2.3
3.2%
6.0%
1.8%
Japan
GDP (Inflation-Adjusted), Annualized Growth Rate
Residential & Business Investment (Inflation-Adjusted)
Consumer Spending (Inflation-Adjusted)
Retail Sales at Supermarkets and Department Stores 1
Consumer Confidence (Points) 1
CPI (Headline Index)
CPI Food Index
CPI (Core Index, excluding food and fuel)
China
GDP (Inflation-Adjusted), Annualized Growth Rate
Residential & Business Investment (Inflation-Adjusted), NSA 1
Consumer Spending (Inflation-Adjusted), NSA 1,2
Retail Sales of all Consumer Goods, NSA 1
Consumer Confidence (Points) 1
CPI (Headline Index), NSA
CPI Food Index, NSA
CPI excluding food and fuel prices, NSA
Growth
Q-to-Q or Chg Chg Q-to-Q
M-to-M Y-to-Y or M-to-M
0.4%
-0.9%
-2.7%
14.0%
1.0%
13.1%
1.8%
0.0%
0.3%
0.4%
0.1%
-0.1%
-2.3
-3.9
-1.2
0.7%
0.4%
0.7%
0.1%
0.1%
0.1%
0.2%
0.1%
-0.1%
Growth
Q-to-Q or Chg Chg Q-to-Q
M-to-M Y-to-Y or M-to-M
0.0%
-0.1%
1.0%
0.0%
-4.4%
1.3%
0.5%
0.0%
1.0%
-0.1%
-0.4%
0.3%
1.6
1.1
0.4
0.0%
-0.2%
-0.1%
1.4%
-0.4%
1.0%
0.0%
-0.1%
0.1%
Growth
Q-to-Q or Chg Chg Q-to-Q
M-to-M Y-to-Y or M-to-M
8.2%
0.1%
-0.4%
0.0%
0.0%
67.2%
-2.2%
-1.2%
-2.8%
-1.4%
-0.8%
-2.8%
1.0
-1.6
1.6
2.6%
1.2%
4.1%
3.0%
3.1%
-1.6%
-0.2%
0.3%
-0.9%
© Copyright 2013 Kantar Retail
Source: EuroStat, Japan National Statistics Center, National Bureau of Statistics of China, U.S. Department of Commerce, Conference Board, and Kantar Retail
11
Frank Badillo
Senior Economist
Doug Hermanson
Economist
KRIQ
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F: +614.355.4059
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Topics
& Trends > Macroeconomics
© Copyright 2013 Kantar Retail