GB: CBI Distributive Trades


Wed Mar 28 05:00:00 CDT 2018

Consensus Actual Previous
Level 7 -8 8

Highlights
The CBI's new Distributive Trades Survey paints a fairly miserable picture of the high street in March. The balance of respondents reporting an increase in volume sales from a year ago slumped from February's 8 percent to a much lower than expected minus 8 percent, both its sharpest decline and its weakest level since last October.

To make matters worse, actual sales were down a full 1.0 percent on the month in March 2017 so base effects should have made for some upside bias. Sales for the time of year (minus 27 percent after 4 percent) were well below normal but at least there were small gains in orders (6 percent after 3 percent) and expected orders (11 percent after 9 percent).

Nonetheless, the March report is soft and the CBI sees what it describes as only a tepid recovery next month (forecast sales index 16 percent). Bad weather in late February/early March almost certainly had a negative impact but there are signs that the ongoing squeeze of household budgets is taking its toll too. If today's results are borne out in the ONS data, the widely expected hike in the BoE's Bank Rate in May could be the last for some time.

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