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BillTrust survey finds B2B sales up, but growth sustainability unclear

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An increase in September business-to-business sales may not alleviate uncertainty about how long the upward movement might last.

Business-to-business sales gained in September, according to a survey, but an economist says progress is tempered by uncertainty that the increase will translate into sustainable growth.

The BillTrust B2B Sales Index, a measure based on business-to-business invoice activity, increased more than 1.5 percent in September to 103.75, up from 102.17 in August.

Economist Arthur Ferri, who handles the survey funded by Hamilton-based electronic billing company BillTrust, said the sales gain in September, which followed a larger gain in August, is clouded by other less encouraging trends.

Ferri said the sales gain was not accompanied by growth in invoice or customer counts, which are measured separately by BillTrust. Invoice counts gained only 0.1 percent while customer counts declined 0.1 percent in September, basically a wash.

Ferri said that could mean that sales gains, which are measured in nominal dollars, reflect inflation rather than real growth. Plus sales gains the past four months have been volatile, he said, noting that June and July were down months for the index.

"I think it's indicative of more macroeconomic uncertainty and or inflation," said Ferri, a BillTrust consultant and former associate professor in the finance and economics division of Columbia Business School.

"So even though the picture is rosier, it is more uncertain," he added. "More uncertainty is, all things being equal, a bad thing."

The index is based invoice data from industries including hardware, plumbing, heating equipment, electrical goods, building supply and other wholesale clients whose bills are handled by BillTrust. Firms in the index are selected on the basis of low sales volatility.

Ferri said index results, which have been a relatively accurate predictor of Gross Domestic Product performance, don't suggest strong growth in the coming months.

"It's probably a good picture for nominal GDP. Real GDP? That's a question mark,' he said. "The invoice counts and customer counts are not supportive of real GDP growth."

The September figures don't factor in the partial government shutdown and concerns that the Treasury Department won't have enough income to pay all its bills on Oct. 17 unless Congress extends the governments borrowing authority. The situation is being closely monitored by financial markets.

Looking ahead, Ferri said the additional uncertainly can only create further problems.

"Clearly when you put a lot of people in furlough, and sometimes they get paid for that time later and sometimes they don't, that just hurts so many people who are probably not in the top 20 percent," Ferri said. I'm concerned that, when the average Joe or Josephine is not doing very well, we're doing things on top of that to hurt them."

For more information about the index, visit billtrust.com.

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