Consumer demand has shifted from goods to services
22:26
According to the Central Statistical Office (GUS), retail sales (in constant prices) increased by 3.9 percent y/y in July 2021. In monthly terms, an increase of 2.1 percent was recorded. After eliminating the influence of seasonal factors, retail sales in constant prices in July 2021 were lower by 1.5 percent compared to June 2021. Retail sales in current prices in July were higher than the year before by 8.9 percent and increased by 2.5 percent monthly.
According to the GUS, construction and assembly production (realized by construction companies employing more than 9 people) increased in July this year by 3.3 percent y/y. In monthly terms, it decreased by 4.7 percent.
The structure of retail sales showed a decline in sales of durable consumer goods – mainly cars ( minus 2.9 percent y/y) due to supply barriers, as well as furniture, radio, and household appliances (minus 1.9 percent y/y).
The construction sector also showed lower dynamics of growth than assumed by the market consensus and public investment was stopped. The construction sector globally records a high recovery – hence the domestic performance is reflected in shortages, delays in the supply of materials, and rising costs due to the ongoing pandemic.
Economists estimate that the data released this week from the domestic real economy indicate that the recovery in trade and industry, after a phase of strong rebound and the realization of accumulated demand, is entering a stabilization trend. In the face of rising inflation and uncertainty related to the sustained state of the pandemic, consumer sentiment declines in the August values of the current and leading consumer confidence indices.
