February's CBI distributive trades survey was surprisingly firm. The headline sales balance rose from January's lowly minus 23 percent to 2 percent, some 15 percentage points above the market consensus and 17 percentage points stronger than the CBI's own expectation. Even so, with actual sales dipping just 0.2 percent on the month in February 2022, the latest reading should imply only a broadly flat period for demand. Moreover, with a forecast of minus 18 percent, the CBI sees a renewed drop in March.

Orders placed with suppliers (minus 25 percent after minus 32 percent) remained weak and are seen declining at much the same pace in March (minus 23 percent). Not helping were expected selling prices (80 percent after 82 percent) which were close to their record high. That said, sales for the time of year (6 percent after minus 3 percent) were quite good and while retailers are still bearish about near-term prospects (minus 6 percent after minus 22 percent), they are less so than in the previous quarter. Similarly, investment intentions (minus 16 percent after minus 38 percent) were also less negative.

The February survey is a mixed bag but in general describes a retail sector that is struggling to keep its head above water and will be hoping for some support from next month's budget. Still, more generally, with the UK's ECDI (17) and ECDI-P (36) both in positive surprise territory, at least overall economic activity is outperforming market expectations.

The headline sales balance is seen at minus 13 percent, up from minus 23 percent in January.

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.