Agents' Summary of Business Conditions - July 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 16 July 2007

Consumption growth remained firm but eased a little, driven by a slowdown in discretionary spending.
Demand for housing also eased in most areas outside London.
In contrast, investment intentions remained robust.
Demand for exports was again buoyant overall, though less so from the United States.
Growth in manufacturing remained well supported by external and domestic demand.
Output in the construction and service sectors maintained a rapid rate of expansion.
Employment intentions were elevated, with labour demand continuing to be strongest in the service sector. Recruitment difficulties increased in most parts of the United Kingdom.
Capacity pressures persisted and became more widespread across industries.
Growth in pay awards remained well contained. And while growth in total labour costs eased, it remained higher than that in regular pay owing to additional leave provisions and other non-wage compensation.
Annual input price inflation increased again in June, as did output price inflation. There was further evidence of margin rebuilding by manufacturers.
Annual consumer price inflation ticked down but remained above its average of recent years.