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B2B sales post below-average gains in October, N.J. firm says

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Business-to-business sales posted below average results in October, according to an index tracking those sales, marking the latest bump in a string of volatile months.

The Billtrust B2B Sales Index, based on customer invoices of the Hamilton Township-based Billtrust Inc., posted a gain of 0.4 percent in October, about half the average monthly gain of the past three years.

Arthur Ferri, a financial economist and Billtrust consultant who manages the survey, said the sales gain wasn't backed by broad increases in other categories, suggesting overall growth is uneven rather than robust. For instance, invoice counts rose 0.5 percent among participating businesses, but customer counts declined 0.1 percent.

"All things being equal, it would be great if everything were growing, but that's not what we're seeing," Ferri said.

The index is based on 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.

On average, each firm surveyed sends 11,000 invoices per month to 1,500 customers. The firms in the index generate total invoice amounts of $17 billion annually.

In October, the index's total score was 104.3, up from a September reading of about 103.9. Ferri said the average monthly gain has been near 0.8 percent the last three years.

The latest results followed an erratic summer that saw plummeting activity in June and July followed by inconsistent rebounds. Ferri said the volatile results likely mirror trends in new home construction, which have also been erratic since summer.

"If that sector is much more volatile, it's more likely that contractors' business is more volatile, and that makes the business of suppliers more volatile," said Ferri, formerly an associate professor in the finance and economics division of Columbia Business School.

October was also the month of the government shutdown and Congressional brinksmanship over the debt limit, though Ferri said no hard evidence in the report traced any decline to that disruption.

Either way, the results don't suggest strong growth in the coming months. Ferri said survey data tend to align closely with national gross domestic product growth.

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