Agents' Summary of Business Conditions - May 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 22 May 2007

Consumption growth picked up, with retail sales boosted by unseasonably warm weather.
Demand for housing was firm, and there was continued upward pressure on house prices.
Investment intentions strengthened further, especially in the service sector.
Demand for exports remained buoyant and exceeded companies’ expectations.
Manufacturing activity remained well supported by external demand.
Output growth in both the construction and service sectors continued to rise.
Employment intentions increased, driven largely by demand for labour in the service sector. And recruitment difficulties became more pronounced in most regions.
Capacity pressures remained high, especially in the construction and service sectors, but also became more evident in manufacturing.
Growth in pay awards increased only slightly, though increases in other forms of employee compensation continued to drive stronger reported growth in total labour costs than suggested by official data.
The recent sharp fall in input price inflation was arrested in the month, while output price inflation edged up — consistent with margin rebuilding.
Consumer price inflation remained elevated.