High Street Volumes Below Expectations

Retailers were disappointed at 'flat' retail trade after hopes of growth to seasonal norms but it was better than the year-on-year fall in sales of last month according to the latest CBI Distributive Trades Survey. Sales are expected to improve again next month. Sales volumes showed slight increases for a narrow majority of retailers.

Wholesalers and motor traders both reported increases in sales volumes but they were also below expectations.

Retailers Reporting Strong Growth

The CBI distributive trades survey reports that retailers have seen improvements in sales and increases in staffing numbers. Year on year growth in sales volumes increased for the third consecutive month but retailers considered sales to be below normal for the time of year.

Confidence Growing In Service Sector

Confidence is growing in the service sector and firms are more optimistic than three months ago according to the latest services survey by the CBI. It is because business has generally been better and things are expected to continue improve in the coming months. Business are also employing more staff and spending more time on training. The business situation is better than it was three months ago according to consumer service providers. Volumes fell at a similar rate but values fell more slowly due to slower price deflation. Selling prices fell slightly but are expected to rise. Professional and business services firms were much more optimistic than the last quarter. There was an unexpected improvement in both business volumes and values and volumes are expected to continue to grow and growth in values is expected to strengthen. Profitability stabilised when it was expected to fall and is expected to grow in the next quarter.

Confidence Low In Small Businesses

UK SME's are still not confident according to the most recent CBI SME survey. Output is still at the same levels as last quarter but new orders are falling. Concern about the political and economic uncertainty increased sharply the survey suggests.

Trends Suggest Things Will Get Better

New orders increased over the last three months along with export deliveries according to the CBI Industrial Trends survey. Unit costs have increased generally. There was also an increase in the volume of output. Currently 64% of firms are working below capacity but the volume of new orders is expected to improve over the next three months. Export deliversies are also expected to increase. Production is expected to increase likewise but firms expect employment to fall and unit costs increases are expected.

Retail Maintains Growth

Volumes of retail sales increased for the third consecutive month in the year to September and were above average for the time of year according to the CBI Distributive Trades Survey. Supplier orders also increased. Volumes are expected to increase again in October. There were also increases in wholesale but motor trade volumes were unchanged and have been declining now for three months.

Manufacturing Output Expected To Grow

Production is expected to grow in the next three months manufacturers said in the latest CBI Industrial Trends Survey. There is a general improvement in the trend of demand for UK manufactured goods and growth expectations have accompanied the need to replenish stocks. Price pressure intensified again and many firms expect to raise prices.

Growth In SME Orders Expected To Fall

Smaller companies have seen production growth in the three months leading to the latest CBI SME survey due to stronger domestic and overseas demand and rebuilding stocks of goods. The total volume of new orders has grown over the quarter and exports were particularly strong. Weaker demand over the next quarter could cause it to stall as expected orders fall.

High Street Hopes For World Cup Recovery

Retail sales again fell slowly in June according to the Distributive Trades Survey for June from the CBI. The results are still better than expected and an improvement on May. The decline was led by a sharp fall in footwear and then leather and hardware, china and DIY. It is hoped that the World Cup will have a beneficial effect in the July survey.

Demand For Manufactured Goods Slightly Weaker

The latest Industrial Trends report from the CBI says that overall demand for UK manufactured goods weakened slightly in June. Order books are still close to their long-term average. Export orders are however also weaker compared with last month but almost normal. Output is still expected to be increased during the next three months. Prices are expected to rise but more slowly than the last three months. Consumer goods are not exopected to rise and no change is expected in capital goods. Stocks are more than adequate to meet demand for the third month in a row, but below the survey's long-run average.

Perspectives On The Coalition's Programme

The Conservative/Liberal Democrat coalition recently set out it's programme for government in the Queen's Speech during the State Opening of Parliament. There were a number of responses to the Queen's Speech from industry.

The CBI agreed with the Coalition putting deficit reduction and securing economic growth at the heart of it's programme. The CBI called the speech ambitious and far reaching and said the Government has a sense of responsibility. They welcomed the NICs measures because the economy should be encouraged to create jobs, they were encouraged by the tax and benefits proposals and the reforms affecting the responsibilities of the Bank of England. The creation of an Office for Budget Resposibility (OBR) was welcomed as something the like of which they have been calling for some time to add some transparency and credibility. On planning they say that a new major renewal of infrastructure is needed but that the Government had some innovative ideas that may help local authorities accept new developments. They welcomed the Government's commitment to the climate change agenda and that emissions reductions targets could be reached if consumers and business improve energy efficiency. They support the Goverment's plan to increase and improve the diversity of education providers to help with failing schools and to give young people the knowledge and skills they need to be successful and they also support the idea of creating a single welfare-to-work programme tailoring to unique needs. The CBI believes the Government should give more scope in innovation and efficiency to the re-engineering of the health service and other public services without affecting the quality of services and that private sector providers deliver high-quality services within the NHS.

The FSB welcomes the plan to safeguard jobs, support the economy, simplify the tax system and the reversal of the NICs plan. It also welcomes the plan to support high-speed broadband Internet connections as more than half of small businesses rely on the Internet for up to 50% of their business. It would help, in particular, small firms in rural areas. The FSB will be looking into the proposals to introduce more flexible working. It also welcomes the proposals for a universal postal system.

The NFU saw the speech as a 'cuts' agenda containing numerous Bills aimed at facilitating the £6bn of cuts necessary to cut the budget deficit and restore economic growth. They noted a lack of Bills relating to agriculture and the food industry and the fact that Defra was not given any primary legislation to pilot for the next 18 months. The NFU were interested in proposals to reduce the number of quangos and whether they will affect Defra in any way. Also of interest were the green energy proposals for energy efficiency in homes and businesses. The proposed Decentralisation and Localism Bill is central to the drive to devolve greater powers to councils and local communities over planning. Regional Development Agencies may be replaced with Local Economic Partnerships if the propoals are successful. NICs proposals for employees may still go ahead even if the plans for employers and reversed. The NFU were also interested in the proposed commitment to hold a referendum if there are any more EU Treaty measures that directly affect UK sovereignty. Non-primary legislation of interest included the high-speed Internet connections proposals as it will include consideration of increasing availablity of broadband in rural areas. The NFU also noted the absence of proposals for flood provision and sharing the cost and responsibility for animal health.

The CLA welcomed the proposed Energy Bill saying it is a chance to improve energy efficiency. They warned that the proposed Decentralisation and Localism Bill could create more red tape around gaining planning permission. The CLA insists that rural businesses should not be left behind in the roll-out of high-speed broadband connections.

The TUC said that the Speech contained some important issues they could welcome like restoring the state pension link with earnings, cracking down on high-risk activities in the City and an the plans for green energy. They saw possible positive changes in extending flexible working rights to all employees and action to close the pay gap. However, plans to end initiatives to get young people into work, the abolishing of key public bodies and the resulting public sector job losses could only worsen the economic situation. They also emphasised that the focus on reducing the deficit is a mistake. The focus should have been on restoring growth and reducing unemployment.

The Cabinet Office has also announced that there will be an emergency Budget on 22 June that will set out a comprehensive and credible plan to eliminate the deficit over the course of the Parliament. The independent Office for Budget Responsibility has been created for best practice in fiscal transparency.

Sales Continue To Grow On The High Street

Growth in High Street sales has continued into the third consecutive month and it is expected to continue according to the latest CBI Distributive Trades Survey for April.

The moving average of sales volumes remained positive and growth is expected again in May. Although there wasn't much change in the volume of orders placed on suppliers it is also expected to grow in May. Stock levels are more than adequate to cover demand.

Wholesalers saw sales volumes grow rapidly and expect the same in May. Industrial materials wholesalers also had strong sales growth except for agricultural machinery and electrical installation materials who reported a difficult April. Durables wholesalers sales stabilised after a difficult March. Motor trades sales fell for the fourth consecutive month and they expect another fall next month. Parts and accessories sales grew for the third month in a row.

UK Order Books Looking Better

The manufacturing sector looks to be improving but profits are threatened by rising costs according to the latest Industrial Trends survey from the CBI. The first three months to April show that orders are rising for British made goods overseas but as order books are still recovering from 30 year lows, total order books are still below normal.

The growth in orders is expected to continue over the next few months and production is expected to increase along with it. It is reflected in business confidence which continues to improve. Average unit costs are rising and though domestic prices were stable prices may increase in the next three months. Most firms say they working below capacity.

Firms have continued to de-stock but levels of finished goods have fallen in the quarter and are expected to stabilise in the next as is work in progress as the decline in raw materials slows down. Credit and finance are expected to continue to limit output over the next three months and even constrain exports. A majority of firms have plans to invest in training and retraining and in innovation.

Sales Growth On The High Street Expected To Continue

Retailers have seen growth for the second month running according to the CBI Distributive Trades Survey for March. The trend is expected to continue through Easter. Sales volumes were reported to be higher than the same time last year as expected. The volume of orders also grew for the second month in a row. Stock levels are more than adequate to meet demand. Very strong sales were reported by grocers, durable household goods, clothing, furniture and carpet retailers. Hardware, china and DIY reported falling sales for the second month. The wholesale sector also saw a fall in sales against expectations. There was strong sales growth in the food and drink sector but agricultural machinery sales and builders merchants had a difficult month. Motor traders also had another bad month due to a drop in vehicle sales while parts and accessories sales grew for a second month.

Business Services Still Under Pressure

Volumes of business in the service sector rose in the most recent quarter according to the CBI services survey, but while consumer services improved slightly, business services did not.

The value and volume of consumer services increased over the last three months with the survey balance up 10% the highest since August 2007. Profitability did not change much but with costs rising only 2%, the best figures since November 2007. Sales prices increased and are expected to rise again during the next quarter.

In business and professional services it was slightly different. Although value and volume of business was little changed, according to the survey, prices and profitability fell, giving a negative balance.

The survey also reported that both consumer and business services were cutting back on staff. It also reported that on the whole both sectors were more optimistic about the business situation than the last quarter and plans to expand were more numerous in consumer services than business services. A factor affecting service sector businesses expansion decisions was concern about the strength of demand and their ability to raise funds was considered a barrier to growth.

Better Performance Than Expected On The High Street

Retail sales outperformed expectations for January according to the CBI distributive trades survey for February. The survey also revealed that although inflation has increased job losses have slowed down. Investment intentions have also improved.

The majority of respondents said their volumes were up in February with a marked improvement on January's survey results and beat their expectations. Orders improved in line with sales volumes. Retailers also expect further growth in sales and orders next month. Stock adequacy remains low.

The busines situation is expected to be fairly stable over the next three months. The job situation seems to be easing with the balance of businesses cutting back on staff expected to be the same in the next quarter. Annual capital expenditure in the next year is expected to remain about the same as in 2009.

Prices rose steeply in February but they probably reflect the changes in VAT coming in at the beginning of 2010. Clothing and grocers had a good month. Durables, furniture and carpets also did well. Among those that didn't do so well were hardware, china and DIY. Wholesalers did quite well but motor trades sale volumes fell and are expecting a further fall over the next quarter. The next quarter is expected to get worse, by a slight majority, and employment is expected to remain stable.

Retailers Disappointed By Fall In Sales

The January CBI Distributive Trades Survey says that retailers were disappointed by the slight fall in sales in early January having expected a three month run of growth. The extreme weather conditions may be partly to blame for the sales figures for the usually busy New Year sales. The increase in the VAT rate may also have been an influence. Retailers expect sales in February to be about the same as last year.

Growth In Manufacturing Output

An increase in overseas demand for UK goods and continued stock reduction saw manufacturing production increse for the first time in two years according to the latest CBI Industrual Trends survey for the three months to January 2010. Weak demand and access to finance mean that the outlook is still uncertain.

The survey reports the strongest output since January 2007 and the first increase in export orders since January last year. De-stocking is slower however and demand is weaker than expected. Business confidence is continuing to get better and more more managers are optimistic than three months ago. Fewer businesses reported reductions in staff numbers.

Business are also reported to be planning to invest in training and retraining and innovation. Capital investment in buildings is expected to be reduced but plant and machinery investments will remain almost unchanged. Firms are working below capacity and domestic prices are expected to rise.

High Street Building Up To Christmas

The CBI report retailers are enjoying an early build up to Christmas with the third successive month of growth in sales. The Distributive Trades survey suggests sales have grown over last year and could grow still more before the end of the month. Sales for the time of year are below seasonal norms and described as poor by some retailers.

Stock levels remain almost unchanged from November but the volume of orders rose again but at a slower rate than expected. Orders are expected to flatten in the New Year, as are sales.

The highest rates of growth were in the grocery, durable household goods, footwear and leather and furniture and carpets. Booksellers and stationers saw a reversal of their recent growth and there was a fall in sales at the chemists.

Industrial materials reported an change for the better as fourteen months of falling sales ended with a flat month. Clothing, textiles and footwear wholesalers saw their best sales growth since 2004.

There was a second month of growth for motor traders who expect that to contiue into the New Year due to the scrappage scheme. Sales for the month were said to be above average.

Weak Recovery Reflected In December Demand

Manufacturers are saying that the recovery they experienced over the last few months is very fragile and it is reflected in the recent downturn in output. A slight balance of respondents taking part in the latest CBI Industrial Trends survey report weak demand and order books below normal. The survey also reported the balance of adequate stocks has fallen slightly. Prices are expected to fall in line with the lst two months.