Agents' Summary of Business Conditions - March 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 March 2005

The growth of consumer spending eased. Retail sales growth has weakened, though parts of the consumer service sector continued to show reasonable growth.
Confidence in the housing market improved a little, but remained fragile.
Exports continued to grow modestly. Looking ahead, exporters expected a little stronger growth in demand in the next six months.
Investment intentions remained fairly upbeat, though there were risks that future investment plans might be cut back should consumption growth continue to weaken.
Manufacturing output continued to grow gently.
Construction output growth remained above trend and was buoyed by strong demand from the public sector. Looking towards the end of the year, the expectation was for the rate of growth to ease slightly.
Service sector output growth has been brisk, though perhaps slightly off its recent highs.
The labour market remained tight, but may have eased very slightly. Private sector employment growth was subdued.
Capacity utilisation remained slightly above normal.
Pay pressures have edged a little higher, though most businesses reported that wage costs remained under control.
Input prices, especially of oil-based products, continued to increase. But the rate of increase was a little lower and there were signs that the annual rate of input price inflation may have peaked.
Output and consumer price inflation remained on a gently upwards trend.