GB: CBI Distributive Trades

April 27, 2017 05:00 CDT

Consensus Actual Previous
Level 6 38 9

The CBI's latest Distributive Trades Survey paints a very bullish picture of retail sales this month. At 38 percent, the balance of respondents reporting an increase in volume sales from a year ago was up some 29 percentage points versus March's outturn, even further above the market consensus and at its highest level since May 2015.

With actual sales rising 0.9 percent on the month in April 2016, the jump in the CBI's gauge suggests a bumper period for high street retailers. However, once again it looks as if the timing of Easter had a significant impact and this is reflected in the CBI's forecast for a decline in the index to 16 percent in May.

Even so, with sales for the time of year above seasonal norms and growth of orders placed with suppliers hitting a one-and-a-half-year peak, it looks as if underlying developments were also very positive.

Retail sales have struggled of late and have fallen in four of the last five months. Today's survey points to a potentially solid bounce in April but whether or not it can be sustained over the rest of the quarter remains to be seen.

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.

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