Uncertainty still hangs over Europe, where politicians struggle to wring out near-term fixes for ongoing economic woes. However, consumers in some pockets of Europe recently shrugged off the malaise (at least for a little while) and pulled out their wallets.
Recently released retail sales reports from around Europe showed a general unexpected uptick in May. According to reports from Forbes and Bloomberg, gains in France, Ireland, Portugal, Sweden, and Switzerland from April helped offset decreasing demand in Germany and Spain. (Italy had not posted its May numbers when the reports came out, but it did have a down month in April.)
Coming into June, the Samsung Galaxy S3 phone topped the "hot" list and had mobile operators excited. According to Forbes, sales have been "remarkably strong," and the phone could have a blockbuster run during the summer, because of uncertainty about when Apple Inc. (Nasdaq: AAPL) will unveil its new iPhone.
But Samsung Electronics Co. Ltd. (Korea: SEC) took a more cautious view of the European market. Even though Galaxy smartphone sales fueled a record quarterly profit of $5.9 billion, the South Korean technology company says it is worried about how Europe's debt crisis will impact television and home appliance sales.
It's hard to say what tipped consumer spending in some places and not others, and the reports I read online didn't provide much insight. These numbers -- and broader consumer sentiment -- fluctuate frequently and often include some amount of seasonality. Nevertheless, given the overall depressing climate in Europe, they were welcome news.
Despite the May retail sales figures, which actually fell 1.7 percent from a year earlier, the economic outlook is grim -- or, at least as most people here are getting used to hearing, not much different from what it has been the last few years. Economists forecast unchanged sales, and Bloomberg reported that "Europe's economy probably failed to grow in the second quarter as budget cuts eroded consumer spending just as companies stepped up job cuts and global demand faltered." Then there's the issue of unemployment, which is a constant drag on the economy and hit a record high in the euro zone in May.
There was some euphoria in the stock market after Europe's 19th crisis conference in Brussels last week, which, according to the Economist offers "guarded optimism" for regional improvements. Nevertheless, it's questionable if political leaders have gone far enough with reform efforts. For instance, International Monetary Fund chief Christine Lagarde said again this week that even though she applauds the steps taken so far, more must be done to solve the euro zone crisis.
EBN will host a live Webchat next week on the economic situation in Europe and its impact on high-tech companies, many of which will be reporting second-quarter numbers in the coming weeks. Click here to register.