Agents' Summary of Business Conditions - December 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 18 December 2007

Growth in the value of consumer spending eased further, though growth in sales volumes remained more resilient, supported by discounting.
The easing in demand for housing accelerated in most regions; house price inflation also fell.
Investment intentions fell again, though they had been pared back ahead of the recent financial turmoil. The Agents conducted a survey on credit conditions (see box), and found that a small majority of companies were not affected by tighter credit conditions. Of those affected, it was most common for companies to take no action or to change financial arrangements. But around one third of companies were changing investment plans.
Total demand for exports remained firm.
Growth in manufacturing output was solid. Growth in construction, while very strong, eased noticeably, and service sector activity slowed sharply.
Employment intentions and recruitment difficulties eased, reflecting softer demand in the service sector.
Capacity pressures lessened in service industries, but persisted elsewhere.
Growth in total labour costs remained well contained. The outlook was for slightly higher growth in settlements but an easing in the variable component of earnings.
Annual input price inflation jumped higher in the month, while output price inflation was little changed.
Annual consumer price inflation ticked up, driven by higher prices of fuel and food.