Agents' Summary of Business Conditions - March 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 20 March 2007

Growth in consumer spending eased, but remained firm.
Overall housing demand was still robust, though the outlook for new home building had become less certain.
Investment intentions persisted at high levels, particularly in the service sector.
Demand for exports remained healthy despite sterling’s appreciation.
Growth in manufacturing output eased a little.
Construction output rose further, supported by both public and private sector projects.
Service sector output growth continued at a rapid pace.
Employment intentions increased, driven by demand for labour in the service sector.
Recruitment difficulties increased, with skill shortages becoming more broad-based.
Capacity pressures remained high in some sectors, and were greatest in construction and services.
Growth in labour costs strengthened, consistent with increased recruitment difficulties.
Growth in materials costs slowed from its earlier rapid pace so that input price inflation eased again.
Consumer price inflation remained steady at its recent relatively high rate.