GB: CBI Distributive Trades

Thu Nov 23 05:00:00 CST 2017

Consensus Actual Previous
Level 5 26 -36

Following a misleadingly weak report in October, the CBI's new Distributive Trades Survey paints a much brighter picture of retail sales in November. At 26 percent, the balance of retailers reporting an annual increase in volume sales was up some 62 percentage points versus its level at the start of the quarter and significantly stronger than market expectations.

The rebound retraced most of October's huge 78 percentage point decline and the recent exceptional levels of volatility suggest that individual monthly readings may not mean a great deal. Still, the CBI looks for a further improvement in December (forecast index 30 percent) and solid growth of orders placed with suppliers bodes well.

Nonetheless, the broader quarterly survey found a fourth consecutive fall in employment and optimism has slipped a little. The outlook remains unclear and the upcoming Xmas period will be even more important than usual.

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