GB: CBI Distributive Trades

Thu Jun 25 05:00:00 CDT 2015

Consensus Actual Previous
Level 33 29 51

The CBI's latest Distributive Trades survey points to some cooling in high street spending in June with the balance of respondents reporting an annual rise in volumes sales of just 29 percent after a 51 percent print in May. However, while below expectations, the June outturn was still the second highest since January and well above the levels seen in February through April.

Sales for the time of year, normally regarded as a better gauge of underlying trends, were down 24 percentage points at 6 percent but again, compared favourably with their level for most of the year to date. Orders shed 10 percentage points to a still firm 31 percent and the CBI's own forecast of sales in July weighed in at 33 percent, so 4 percentage points stronger than the June outturn.

Actual sales were essentially flat on the month in June 2014 so the latest drop in the CBI's annual growth measure should equate with a monthly decline this time around. However, the short-term correlation between the two is poor, as highlighted in last month's data. Nonetheless, at 31 percent, up from 27 percent in May, the average CBI index over the last quarter is high enough to suggest that consumers should continue to make a sizeable contribution to real GDP growth for some time yet.

This survey was first introduced in 1983 and is an indicator of short-term trends in the UK retail and wholesale distribution sector. The quarterly and monthly surveys both cover volume of sales, orders on suppliers, sales for the time of year and stocks, while the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Both monthly and quarterly surveys now contain questions on current and expected internet sales and average prices for internet goods.

This survey is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The monthly update provides a vital update on volume of sales, orders and stocks. Like the industrial survey, it carries significant weight in the formulation of economic policy at the Bank of England and within government as a highly respected barometer of high street trade. It is considered to be an advance indicator of retail sales although it is not well correlated with the official data on a monthly basis.

Monthly and quarterly