Detailed below is the Weekly News for 6th March.
Please note there will be no Weekly News next week.
Gordon Polson – FOB Director
CBI: Regular roundup of the key economic indicators
Retail sales (incl. automotive fuel) unexpectedly fell by 0.3% on the month in January following a drop of 2.1% in December, disappointing consensus expectations of a rise of 1.0%. The largest downward contribution came from non-store retailing, which fell 4.1% in January. Annual retail volumes growth also decelerated to 1.5% over the year to January, marking the weakest growth since November 2013.
Our Distributive Trades Survey suggests that retail sales had grown modestly in the year to February, driven by the clothing and non-store sectors, though the sector is clearly facing challenges. Employment fell at the fastest pace for two years, and a similar reduction in headcount is expected next month. And for the first time in four-and-a-half years, retailers expect their business situation to deteriorate over the next three months. Higher costs are feeding through to inflation, with average selling prices increasing at the fastest pace in almost six years and prices set to rise even more rapidly next month.
According to the CBI’s Service Sector Survey, demand in the services sector picked up a little in the three months to February. Underpinning the pick-up was consumer services, who saw volumes rise at the fastest pace since August 2015, whereas business and professional services reported that volumes were flat. Rising costs are putting pressure on prices across both sectors, with expectations for selling price inflation climbing to the highest in a decade among business and professional services, whilst among consumer services they rose to a nine-year high.
Activity also appears to be strong in manufacturing: the CBI’s Industrial Trends Survey found that total orders reached a two-year high, with the strengthening in demand led by the mechanical engineering and metal products sectors. Output growth remained robust in the three months to February and is expected to increase at a faster pace over the coming quarter, with expectations at their highest since September 2013. But once again, firms expect prices to rise strongly over the next three months, with expectations at their firmest since April 2011, as Sterling’s depreciation continues to increase the cost of raw materials.
In its second estimate of GDP, the ONS revised up growth for Q4 2016 to 0.7% from 0.6%. The upward revision was largely driven by stronger industrial production. The data points to an acceleration in growth towards the end of last year, and shows that momentum over the second half of 2016 (post-referendum) was stronger than in the first half (pre-referendum). However, the expenditure breakdown of Q4 growth was a bit of a mixed bag: while household spending continued to rise, business investment fell.
While the GDP figures confirm the resilience of the economy post-referendum, we still expect growth to slow over the next couple of years: principally as rising inflation bears down on household incomes and spending, and uncertainty begins to bite harder on business investment (see our latest forecast for more detail).
Private sector growth picked up in the three months to February, according to our latest Growth Indicator.
The survey of 778 respondents across the manufacturing, distribution and service sectors showed that growth rose to a balance of +15%, climbing from the balance of +10% in the three months to January.
The uptick was largely driven by a rebound in consumer services, which saw the fastest growth in business volumes since August 2015. Retail sales and manufacturing output also grew at solid pace, the latter mirroring its performance in the quarter to January. However, the business and professional services sector saw no change in volumes.
Looking ahead, companies across sectors expect to see similarly decent growth (+17%) over the next quarter.
PHE and Portion Sizes: Recent news articles have focused on the shrinking sizes of the nation’s favourite foods, PHE publicly defend portion size reduction as a welcome measure to reduce sugars in products. PHE’s Chief Nutritionist Alison Tedstone was quoted as saying “for our waistlines we need smaller portions..(for some products) it’s very difficult to take 20% of sugar out – but you can reduce portion sizes”.
Ready Meal Consumption: A new report from Cancer Research UK today claims that least 79 million ready meals and 22 million fast-food and takeaway meals are eaten weekly by adults in the UK, with younger adults more likely to do so. You can read more here.
GCA annual survey 2017:You will know that every year YouGov runs an annual sector survey on my behalf. This collects the views of suppliers, trade bodies and others on retailer compliance with the Groceries Supply Code of Practice (the Code) and on other issues such as awareness of the GCA role and training. The responses to the survey are crucial in helping me identify what issues on Code compliance are of concern and how suppliers view compliance with the Code. Retailers also value this external perspective and they use this to identify areas where they could do better. In general the annual survey indicates that suppliers consider that retailers have continually improved in their compliance with the Code.
This survey was launched on 6 March. You are encouraged to respond. You can do so anonymously but even if you name yourself, GCA has to treat responses confidentially and ensure suppliers cannot be disclosed or identified by a retailer. The survey is available at: www.yougov.com/gca
GCA annual conference – 26 June 2017
The GCA annual conference will take place on 26 June 2017 at Church House in Westminster. Along with updating delegates on the past year achievements and focus for the next twelve months, YouGov will also be announcing the results of the annual sector survey. The keynote speaker will be the Minister for Small Business, Consumers and Corporate Responsibility and Adam Leyland, the editor of The Grocer, will be giving his perspective on developments by retailers since the Adjudicator was appointed. After lunch there will be a short workshop for groceries suppliers on current issues.
You are encouraged to attend. It is a really informative day and gives suppliers a great opportunity to hear first-hand about developments in compliance with the Code. To register, please visit https://form.jotformeu.com/70302978904359.
IOSH Health and Safety Awards: Get your entry in for IOSH’s International Food and Drink Health and Safety Awards 2017.
This year, the awards have gone international. Entry is open to anyone working in the food and drink manufacturing industry anywhere in the world, including occupational safety and health experts, engineers, process operators, managers and workers’ safety representatives.
Entry is free. The entry form is straightforward and easy to complete. Entering the awards is a great way to celebrate your success in tackling an occupational safety and health issue at your workplace. And, if you’re selected as a winner or runner-up, you can share your success with colleagues in the wider industry.
First prize is a trophy, certificate and a cheque for £750. Up to two runners-up will each receive a trophy, certificate and a cheque for £250. We’ll present the awards at the dinner on the first evening of The national food and drink manufacturing health and safety conference on 10–11 October 2017 at The Oxford Belfry, Milton Common, Thame, Oxfordshire, OX9 2JW. A representative from the winner and each runner-up will get a free conference place, a ticket to the awards dinner, up to two nights’ accommodation and up to £500 towards travel expenses. They will also have the opportunity to give a brief presentation on their project at the start of day two of the conference.
Entry is easy. Download the entry form from the Food and Drink Industries Group pages on the IOSH website.
Use the form to tell us what the problem or issue was, what you did to tackle it, how the intervention worked, and the impact it has had in your workplace. Attach any documents or evidence that supports your entry and send it to us before the closing date.
The closing date is Friday 03 July 2017.
If you have any questions, contact email@example.com or call +44 (0)116 257 3248.