Optimism abounds

Retailers reported increased sales for the fifth consecutive month in April, reflecting “stronger fundamentals” in the sector, with optimism climbing to its highest level in more than three years.

Easter put a spring in the step of retail sales in April, according to the CBI’s monthly distributive trades survey, with some 42 per cent of respondents reporting higher sales volumes than a year ago.

Meanwhile, only 12 per cent of those polled said that sales were down, giving a positive balance of 30 per cent, which compares favourably with the 13 per cent recorded in March and confounds the general expectation of a rise of just 17 per cent.

In addition, sales volumes are expected to rise again in May, with expectations for growth amongst retailers at their highest level since December 2010.

Grocery, footwear & leather and hardware & DIY recorded particularly strong annual sales growth, while online sales continued to perform strongly, with the volume of sales rising at the highest annual rate since November 2012.

Meanwhile, separate data from the CBI showed that strong growth in orders is driving a rapid increase in manufacturing confidence, with the level of optimism in British factories at its highest level in more than 40 years.

According to the CBI, 41 per cent of the manufacturers surveyed were more optimistic about business than three months ago, with just 8 per cent less optimistic, giving a positive balance of 33 points, the highest since April 1973.

Overall strength in the sector was highlighted by the latest car manufacturing figures, which showed that UK production jumped 12 per cent in March compared with the same month in 2013.

Rising optimism in the sector, which accounts for about 10 per cent of the economy, is feeding through to plans for increased investment over the next 12 months, boosting hopes that the recovery will become more balanced, with reduced reliance on consumer spending.