MMA Report: Retail Sector Down in 2023, Upturn Expected in 2024

The wholesale and retail trade sector in Q4-2023 experienced a notable contraction, according to the latest Quarterly Business Survey Report by the MMA. The volume of sales index dramatically declined by 117 points to -44, reflecting a decrease in business activities. This downturn was mirrored in the volume of orders placed with suppliers, which also fell by 111 points to -43.

Employment within the sector saw a significant downturn, with the number of employees index plunging 94 points to -20. In contrast, wages and other labour costs per employee showed a positive trend, gaining 93 points to reach 51.

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The sector faced mild price pressures during the quarter. The cost of sales index saw a marginal increase of 1 point, ending at 61. The average selling price index, although still negative, improved slightly, rising 9 points to -50.

The financial situation of companies, though improved by 51 points, remained negative at -3. However, the overall business situation showed signs of resilience, gaining 2 points to reach 18.

Looking ahead, the sector’s outlook for Q1-2024 appears more optimistic. Businesses expect an increase in the total volume of sales and volume of orders with suppliers, with these indices rising to 78 and 77, respectively. Positive trends are also anticipated in the labour market, with improvements expected in both the number of employees and wages.

Interestingly, the expected cost of sales and average selling price indices turned negative, suggesting a forecasted decline in prices for the upcoming quarter. The overall business situation is expected to enhance, with the respective index climbing 11 points to 41. However, the financial situation of companies is predicted to moderate, with the index dropping to 7. The expected index for access to credit remained relatively unchanged and below zero.

This mixed picture of contraction and optimism in the wholesale and retail trade sector highlights the dynamic nature of the current economic environment, presenting both challenges and opportunities for businesses in the upcoming quarter.

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