CBI survey raises doubts over health of economy
THE year-on-year pace of growth in UK retail sales volumes has slowed sharply this month to its weakest since last September, according to a key survey, raising further doubts over the health of the economy.
Of retailers surveyed by the Confederation of British Industry (CBI) between January 24 and February 13, 37% said sales volumes were higher than a year earlier and 29% said they were lower. The net 8% reporting a year-on-year rise in sales volumes was the weakest reading since last September.
Year-on-year growth in sales volumes, as measured by the CBI distributive trades survey, has slowed for three straight months.
Howard Archer, chief UK economist at consultancy IHS Global Insight, said: “A lacklustre CBI distributive survey significantly dents hopes that retail sales bounced back significantly in February after a poor performance in January, when the snow clearly had a depressing impact.
“This is not good news for first-quarter growth prospects, although we still believe the economy should see limited growth of around 0.2% quarter-on-quarter.”
He added: “Given that hard data from the Office for National Statistics (ONS) show retail sales volumes fell by0.6% month-on-month in January, the economy clearly could have done with a marked pick-up in sales in February.”
UK g ross domestic product fell by 0.3% in the fourth quarter of 2012, according to ONS figures last month.
The latest CBI survey showed the grocery sector suffered a sharp year-onyear fall in sales volumes. This contrasted with a strong year-on-year rise in this category in the January survey. But department stores, clothing retailers, and furniture and carpet shops posted sharp year-onyear rises in sales volumes in the latest survey.
Barry Williams, chairman of the CBI distributive trades survey panel, said: “We all know trading is tough, and the bad weather hasn’t exactly been encouraging shoppers to hit the high street lately. But there is a glimmer of hope for retailers with the news that sales are growing, even if at a slower pace than in recent months.”
He added: “Clearly, the road to recovery remains fragile. Worries about the economy, pay freezes and the rising cost of living will mean shoppers remain cautious for the foreseeable future.”