Amongst all the joy coming from watching nothing but Olympics this past week, you would be forgiven for not noticing some of the other news, concerned with boring old business and real life!
And actually quite of bit of it has been pretty positive. You’ll notice in this newsletter today there’s several reports on companies from our sector who have announced positive results. It’s really just the news that tractor registrations fell again in the month of July which stick out and don’t square with the others.
Firstly, making the national headlines this week was the news that the Office for National statistics said that UK retail sales surprised everyone by bouncing back strongly in the immediate post-Brexit month of July.
Seemingly encouraged out onto the high street by better weather and big discounts, shoppers lifted retail sales 1.4% month-on-month in July after June's 0.9% decline. This was a far better performance than market experts had predicted of a 0.1% increase.
Also significantly in July, the quantity bought (volume) of retail sales is estimated to have increased by 5.9% compared with July 2015. All sectors showed growth with the main contribution coming from non-food stores.
The amount spent (value) in the retail industry increased by 3.6% compared with July 2015 and 1.6% compared with June 2016.
Which all makes for welcome reading. Much like the reports this week from Deutz, Argo and Toro, who’ve all released statements which are able to give a positive account of their recent financial results.
Deutz are saying they have seen an improved operating profit, Argo report they have maintained their performance in the face of economic downturn, whilst The Toro Company boast that they have just enjoyed record third quarter earnings. Clearly in corporate financial reports such as these the upbeat will always be emphasised as much as possible, but the fact that they are able to find upbeat things to say at all is encouraging.
So in the face of all this seemingly positive buying news it’s concerning that tractor registrations slipped again last month. This follows on from last week’s story that the first half of 2016 has seen a fall in the total overall tractor registrations. It's unclear what the underlying reasons for this are.
What’s worrying is quotes from people like Samuel Tombs, chief UK economist for Pantheon Macroeconomics who told the BBC, "consumers' blissful ignorance won't last long".
He continued, "July's retail sales figures show that consumers have been protected from the immediate fallout of the Brexit vote, but with firms intending to stop hiring and inflation set to soar, the High Street is set for a tough year.
"The real test for consumer spending lies in 2017 when jobs cuts will kick in and inflation will erode spending power," Mr Tombs added.
However, as much as predictions such as this don’t make for pleasant reading, it appears that the mood out in the independent dealer network is fairly buoyant still. In the latest issue of Service Dealer magazine which is currently at the printers, the results of our last survey show that the majority of respondents are still optimistic about the prospects for the rest of 2016.
With the weather, rather than Brussels, being the most significant influencing factor on outdoor powered machinery sales, dealers seem to be telling us they are just keeping on doing what they do the best – adapting to market conditions and providing consumers with the highest levels of specialist service.
