Agents' Summary of Business Conditions - April 2005

We regularly publish a summary of reports compiled by our twelve regional Agents following discussions with at least 700 businesses across the UK every reporting period.

Published on 21 April 2005

The growth of consumer spending weakened a little further, with the slowdown spreading to parts of the consumer services sector.
Conditions in the housing market were little changed compared with the previous month. According to contacts, potential buyers remained cautious, possibly nervous of further interest rate increases and house price falls. There were fewer first-time buyers.
Export growth remained modest. Exporters of low value-added goods found that margins and sales were increasingly under pressure owing to the weak dollar.
Investment intentions were reasonably firm, supported by improving corporate balance sheets and cash flow.
Manufacturing output was rising gently. Domestic markets were expected to remain subdued in the near term.
Construction output growth remained strong.
Service sector output growth was brisk, though perhaps a little off its recent highs.
Private sector employment growth eased further and contacts reported only modest plans to expand employment in the near term.
Capacity utilisation remained slightly above normal. Spare capacity was least among professional and business services, which continued to report skill shortages.
Pay pressures continued to edge up. That was not yet a major concern for most contacts, partly on account of improvements in labour productivity.
A further rise in oil prices contributed to continued strong growth of input prices.
Gradually increasing cost pressures were having little impact on consumer price inflation.