Economy in Brief

U.K. retail sales fell by 0.2% in September. Monthly sales have been erratic, rising by 0.9% in August after falling by 0.8% in July.

Nominal trends- Sequentially retail sales have weakened, rising by 4.7% over 12 months and at a similar 5.1% pace over 6 months then running dead flat over 3 months. Industry sales of food, beverages & tobacco as well as clothing & footwear also have slowed, 12-months to 3-months.

In the quarter-to-date, U.K. retail sales are rising at a 1.2% annual rate. The nominal year-on-year growth rate ranked on data back to 2002 has a 75.1 percentile standing in its historic queue of data.

U.K. sales volumes- U.K. retail sales adjusted for inflation show more weakness as well as contraction in the quarter-to-date. U.K. real retail sales (sales volume) fell in September and in July just as they do for nominal sales. Sequentially retail volumes contract by 0.9% over 12 months, at a -0.8% pace over six months, and at a -6% annual rate over three months. Real retail sales are falling at a 3.1% annual rate in the just completed third quarter. The queue standing for the nominal growth rate is much stronger than the queue standing for the real growth rate; the latter stands at its 18.8 percentile, a far cry from the 75.1 percentile standing for nominal growth. Sales volumes in the U.K. are weak.

Passenger cars- Passenger car sales/registrations have been rising year-on-year for over 14 months. Even so, monthly setbacks have occurred but have been sporadic. Registrations are up at a 20% pace over three months, six months and 12 months despite weakness elsewhere in retail sales.

Survey results for retailing The CBI surveys show sales and orders rebounded in September. While both series are declining in the third quarter, the rankings are mixed. Sales for this time of year have a 77-percentile standing. However, the volume of orders year-over-year has only an 18.8 percentile standing.

Consumer confidence in the U.K. on the GfK measure edged lower in September (it has since fallen harder in October) and it has a September standing at its 31st percentile, a lower-one-third standing in its ordered queue of historic data.

The INSEE industry climate gauge as a 29.6 percentile standing and the index fell month-to-month to boot. The index is still below (by 3.6 points) its level of January 2020 before the pandemic struck.

The INSEE manufacturing survey The manufacturing production outlook fell back to -10.3 in October from -6.1 in September, only slightly weaker than the August reading of -9.0. These expectations have been weaker since 2001 about 31% of the time and stronger nearly 70% of the time.

Production has a ‘recent trend’ that has worsened in the month as it fell to a diffusion value of -11.3 in October from -6.4 in September and -4.0 in August. This trend has been weaker historically by less than 10% of the time. Survey respondent also supply expectations for their own firm/industry as a ‘personal likely trend.’ This assessment fell to 4.8 in October from 16.6 in September – but it is higher in comparison to August. The reading for the own-firm trend is at a 29.1% standing, much better than for manufacturing overall but still a lower one-third of ranking value.

Orders and demand remained sub-par in October but improved to -17.3 from -21.5 in September and similar weakness in August. This entry has a percentile standing below its historic median at its 44.1 percentile. Foreign orders and demand have shown more persistent progress, rising to -2.9 in October from -13.0 in September; this series, quite contrarily, has a very strong 81-percentile standing. The French, in some sense, expect to be boosted by foreign economies. That remains to be seen since it is far from clear where this stronger growth is going to occur.

On the price front, the own-price responses are weaker than their August levels while for overall manufacturing prices, the expectation is for net stronger pressures. The own price ranking is at 34.8% with the manufacturing index at a 44.9 percentile.