(RTTNews) - UK’s retail sales volume growth eased in August, the latest Distributive Trades Survey by Confederation of British Industry, CBI, revealed on Thursday. As much as 60% of the survey respondents reported decline in sales volumes in the first half of August, while 13% of the respondents said that sales had grown.
The rounded balance of minus 46% was the weakest since the survey began in 1983, the CBI said. Economists were looking for a figure of minus 32%. This was the second successive month of steep falls in retail sales volume, while a similarly sharp decline in sales volumes is expected in September as well.

“Retail conditions have been extremely tough this summer, and the wet August has been a further blow. Sadly, no let up is expected as we head into early autumn,” Ian McCafferty, CBI Chief Economic Adviser said.

The three-month moving average of sales volume declined to a balance of minus 30%, a survey low. Sales for this time of the year were reported as poor by 43% of the retailers surveyed. The weak demand has impacted the volume of orders placed with suppliers, with a balance of 56% reporting a fall in orders, a survey record low.

Average selling prices eased from the previous quarter’s 16-year high to a balance of 48%. However prices rises were reported to be above long-run average and the balance for September is expected to be 42%.

The survey showed that employment in the retail sector was declining, as a net of 31% of the retailers said that the number of persons on their payroll was down from the previous year. The labor market weakness was forecast to continue into September as well, according to the CBI.

Confidence in the sector was weakening, with a balance of 38% of the firms anticipating retail business to worsen over the next three months. This in turn has adversely affected investment intentions, which slid to a balance of minus 34%, weaker than the historical average, the CBI said.

Except for grocers, who witnessed modest annual growth in sales, other retail sectors reported weak sales. Footwear and leather retailers reported a drop in sales for the first time this year. The housing market, durable household goods, furniture and carpets continued to face very difficult business conditions, the CBI observed. “The downturn in the housing market is continuing to depress sales for those shops selling big-ticket items,” said Andy Clarke, Chairman of the CBI Distributive Trades Panel.

Motor traders witnessed a very sharp decline in sales volume of a balance of minus 76%, compared to the same year-ago period. Both retailers of parts and accessories and retailers of vehicles reported drop in sales. The outlook for sales in September was gloomy, the CBI said.

Wholesale sales volumes slipped sharply from the previous year to a balance of minus 29%, even as selling prices grew a robust 62%. On the whole the overall business situation was expected to deteriorate over the next three months, the CBI said. “The business outlook is particularly weak and retailers are having to scale back their employment and investment plans in an attempt to ride out the storm,” said Ian McCafferty.

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