UK CBI Sales/Order Survey Improves Slightly but Still Shows Decline

The CBI net balance diffusion presentation of its survey shows that sales in June were not as weak compared to a year ago as they were in May. But at -9 the result was still in the bottom quartile of the survey’s range of experience and compares to an average response of +2. Similarly orders at -12 were only ‘half as bad’ as the May result but still registered in the lower 30% of their range. Some of this may have been seasonal since sales for the ‘time of year’ scored a net reading of -21 close to last month’s -25 reading, Inventories relative to sales were elevated and stand in the 73rd percentile of their range.

The outlook for July is grim. At -7 the reading is loads worse that the expectation of +6 that had been in place for June. Orders at -13 are much weaker than June’s expectation for -2. Sales for the time of year are expected to worsen to -17 compared to a -14 expectation for June but an actual reading of -21 that emerged. Merchants appear to be still downplaying the risk or maybe that is just normal bias, on their part. The point is that the expectation for sales for the ‘time of year’ is lower in July than it was in June so a worsening is expected at least on that basis.