The COVID-19 pandemic has had a major impact on retail and demand for services around the world, as many countries have imposed the closure of retail stores while bars and restaurants have had to spend several months with chairs stacked on tables and shutters closed.
The pandemic caught most people off guard. In an attempt to combat the pandemic, member states of the European Union (EU) have implemented various measures, including restrictions on non-essential travel.
Non-essential production has been shut down and several countries have imposed regional or even national lockdowns that have further stifled economic activities. Tourism has been wiped out, forcing hotels to close and airlines to cancel flights, wreaking havoc on those industries.
According to a report by Eurostat, the statistical office of the EU, on September 3, retail trade in the EU in July 2021 fell by 1.9% month-on-month, after an increase moderate 1.4% in June on the back of strong increases in February and March, a further decline in April and a recovery in May.
Eurostat said the situation in the 19-member eurozone was worse: the decline there was 2.3%.
Bert Colijn, senior financial expert at ING Bank, said it was not what analysts expected and described it as a “poor start to the third quarter of the year” for retail sales in the euro zone.
However, he was undeterred by the prospects. “The big question is whether the recovery can continue at a decent pace and quickly close the gap with pre-pandemic gross domestic product (GDP).”
“It looks like consumers should contribute positively to this in the coming quarters as unemployment declines rapidly and incomes are therefore increased,” he said.
“Consumer confidence has hit recent highs but remains historically high. All of this bodes well for retail sales growth in the coming quarters and thereafter for a reasonable pace of GDP growth,” he said. -he declares.
Services across the block have also been affected but are slowly recovering. The latest statistics showed that the total service turnover in the EU in the second quarter of this year increased by 3.2% compared to the first quarter.
This relatively strong increase follows a rise of 1.5% in the first quarter of 2021 and 2.1% in the last quarter of 2020.
In the first and second quarters of 2020, the turnover of service industries fell by 3.6% and 17.4% respectively, recovering 10% in the third quarter.
In the second quarter of this year, the increase was the strongest in accommodation and food services (28.4%), while the turnover of transport and storage services increased by 4, 6%.
According to Eurostat, the effects of the COVID-19 crisis have been more dramatic than those of the 2008 financial crisis.
The EU-wide turnover index for hotel and restaurant services has been reduced by nearly 80 points in six months. The transport services index fell by more than a quarter, with the largest losses recorded in air transport.