Economy in Brief

Retailing and Wholesaling continue to show wear and tear The United Kingdom’s distributive trades survey has four parts. There's a survey of retailing and a separate survey of wholesaling. Then for each one of these surveys, there's a module that addresses current conditions and another one that addresses expected conditions.

Current Conditions vs. Expectations for the distributive trades In this month's report, the current conditions assessments improved in retailing but were mixed for wholesaling. Expectations in retailing and wholesaling were also mixed as to month-to-month changes, but the levels of the responses remained quite weak.

The Specifics Current Retailing- Retail sales compared to a year ago improved sharply to a -8 reading in April compared to a draconian -41 in March. Orders compared to a year ago improved at a reading of -24 in April from -38 in March. Sales for the time of year improved to -31 from -36. Sales compared to a year ago have a below median 29.2 percentile standing, while orders compared to a year ago have a 16.9 percentile standing and sales evaluated for the time of year have a 12.3 percentile standing. In each case, the reading from April is below its median reading of the last 24 years. These readings as a collection are weak readings.

Expected Retailing- The expected results for retailing in the survey show mixed results. The reading for sales compared to a year ago at -33 in May is slightly weaker than -30 in April. Orders compared to a year ago improved to -29 in May from -41 in April. But the survey shows a deterioration in sales for the time of year at -38 in May compared to -35 in April. The rankings for these readings range between the 10.5 percentile and 4.2 percentile, range marking them as all extremely weak readings in their historic queue of standings.

Current Wholesaling- Wholesaling also generally shows slippage in April. Sales compared to a year ago fell to -33 in April from in -29 in March, while orders compared to a year ago improved to -32 from March’s -38. Sales for the time of year, which post a reading of -31 in April compared to a reading of -20 in March, demonstrated slippage again. The rankings for these readings range from 4.2 to 9.2 in percentile standing terms.

Expected Wholesaling- Turning to expectations, sales compared to a year ago nudged lower to -26 in May from -25 in April. Orders compared to a year ago improved nicely to a reading of -28 in May compared to -38 in April; expected sales for the time of year slipped to -28 from April’s -27. Several of these are small stumbles month-to-month. But these readings range from a low percentile standing of 7.7 percentile to a high standing at a 12.6 percentile – all weak metrics.

Household confidence in France has steadied after along climb up from an historically weak level. Still, confidence has only a 36.5 percentile standing.

Living standards show mixed changes this month. Standards compared to the past 12 months are a bit better month-to-month, while looking ahead, they are weaker and fall by 3 survey points.

However, unemployment expectations have moved sharply higher for the month, rising to 51 in April from 47 in March, to a very high percentile standing at the 70.4 percentile mark.

Price developments are moderating with weaker readings compared to 12 months ago. The percentile standings for prices, however, are modest, below the 50-percentile mark, showing these are below median readings both looking backward and looking ahead.

The savings environment has worsened both on backward-looking and forward-looking savings responses. And the rankings for these environments are both very high.

The saving environments dove-tails with a spending environment that did improve on the month, remains weak, and has a ranking at its 34th percentile. The environment is very favorable to save and not very favorable to spend.

The financial situation is little-changed in the month either looking-forward or looking-backward. That is a rather odd result, given the uncertainty over tariffs; but then maybe when policy causes uncertainty viewpoints freeze. On a month-to-month comparison, we see stronger financial situation ranking looking back 12-months that has an above median percentile standing at 65.4; but looking ahead there is a below median standing at the 44.2 percentile.

The table also presents two columns tracking the economic shock from before Covid to before the Russian invasion of Ukraine and secondly from that point to date. What this shows generally is that at the time of the invasion, most of the survey items had improved upon their pre-Covid readings. One exception is that unemployment concerns were still further elevated. But then from pre-invasion forward, most readings are substantially weaker. But in comparison, the change in unemployment is strikingly higher.

On balance, France’s household responses seem to exhibit some stickiness that may be a product of uncertainly. The overall readings remain weak.