According to the new CBI Distributive Trades survey the high street had a good August. The balance of respondents reporting volume sales higher than a year ago stood at 24 percent, up from 21 percent in July and above market expectations. It was also comfortably stronger than the 13 percent forecast by the CBI just last month.
Actual sales were up 0.6 percent versus July in August 2014 so the rise in the CBI's annual growth gauge should equate with a decent monthly increase in household spending this time round. That said, the short-term correlation between the two is quite weak.
The CBI is also forecasting the headline measure to climb to 35 percent in September which, if correct, would be its highest reading since May and its third strongest print so far in 2015. Taken at face value the findings suggest that the consumer sector remains in pretty good shape.
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
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