Agents' Summary of Business Conditions - April 2007

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 17 April 2007

Consumption growth stabilised, having slowed in the previous month.
Demand for housing remained firm, though house price inflation was slightly weaker.
Investment intentions persisted at high levels, especially in the service sector.
Demand for exports remained buoyant, despite the continued high value of sterling.
Growth in manufacturing output picked up, boosted by external demand.
Output growth in both the construction and service sectors continued to strengthen.
Employment intentions increased, driven largely by demand for labour in the service sector. And recruitment difficulties increased, with skill shortages becoming more broad-based across types of labour in some regions.
Capacity pressures remained high, particularly in the construction and service sectors.
Growth in across-the-board pay settlements increased modestly, though increases in other forms of remuneration became more pronounced, consistent with greater recruitment difficulties.
In contrast, growth in materials costs slowed further, so that input price inflation eased again. However, output price inflation remained stable as firms rebuilt margins.
Consumer price inflation also remained steady at its recent relatively high rate.