Retail Sales Weighed On By Fuels, Construction Affected By Weather Conditions

Statistics Poland released another round of November economic activity data, which turned out weaker than expected:

• Retail sales +2.6% Y/Y (BBG est. +3.7%)
• Real retail sales -0.3% Y/Y (BBG est. +1.4%)
• Real retail sales -2.8% M/M (BBG est. -1.7%)
• Construction output +3.9% Y/Y (BBG est. +7.4%)

Following the release of the data, local sell-side desks pointed to the impact of adverse weather conditions on construction and noted that retail sales were weighed on by the fuel component.

• ING note that the structure of retail sales data is less pessimistic than headline figures. A sharp correction in fuel sales played a significant role, as the earlier "discount" ended in November, but consumption goods continue to recover amid a decent pace of wage growth. They think construction output may have been affected by heavy snowfall in November, which delayed work on some public investment projects.
• mBank write that the results of the Polish economy weakened in November. Retail sales were weighed on by a decline in fuel sales, with while online sales was a poor reflection of the dynamics observed in traditional distribution channels. Construction may have been constrained by unfavourable weather conditions. In both cases, Q4 continues to look good overall.
• Pekao say that fuel sales dropped amid a sharp increase in prices, durable goods sales finally rebounded, the "infection season" boosted the sales of pharmaceuticals, while the result for clothes was affected by a high comparative base. They think that retail sales should be stronger, but the statistics office classified the details for one category a few years back, which makes it more difficult to interpret the data.
• PKO comment that construction output plays into a series of downside surprises, albeit the recovery trend on the supply side of the real estate market continues, supported by a rebound in real incomes, improving consumer sentiment and the 2% government-backed mortgage programme.