GB: CBI Distributive Trades


Thu Feb 22 05:00:00 CST 2018

Consensus Actual Previous
Level 13 8 12

Highlights
The CBI's new survey suggests slower growth of retail sales this month. At 8 percent, the balance of respondents reporting a yearly rise in volume sales was 4 percentage points short of its January mark and on the soft side of market expectations. It was also 5 percentage points down on the CBI's own forecast and a 4-month low.

However, it was not all bad news. For a start, expected sales in March were put at a solid 21 percent. In addition, sales for the time of year climbed from minus 17 percent to 4 percent, comfortably above their long-run average (minus 1 percent). Moreover, they are expected to rise further in March (8 percent). Orders placed with suppliers (3 percent after minus 5 percent) also firmed and are similarly seen strengthening again next month (9 percent). There were also some signs that confidence is improving as investment intentions for the year ahead (16 percent) reached their highest level since August 2015. This was the first rise in more than a year.

All in all, the February results are rather more robust than the headline data might suggest. Retailers continue to suffer Brexit uncertainty fallout but the sector seems cautiously content about the near-term outlook.

Definition
The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of the UK retail, wholesale and motor trade sector. Volume sales, orders on suppliers, sales for the time of year and stocks are all covered and the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Financial markets tend to concentrate on the CBI's annual sales growth measure as a leading indicator of the official retail sales report.

Description
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.

Frequency
Monthly and quarterly