Agents' Summary of Business Conditions - November 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 November 2007

Growth in the value of consumer spending eased further, though the volume of sales remained resilient, aided by aggressive discounting.
Demand for housing also eased further in most regions, as did house price inflation.
Investment intentions in the service sector fell sharply again in October. They were, however, already being pared back ahead of the recent financial turmoil. So far, tighter credit conditions had not been a major concern for most companies, though posed risks for the investment outlook (see box).
Demand for exports remained buoyant, despite weaker demand from the United States.
Growth in manufacturing was solid, and that in construction remained very strong. However, business services activity slowed further.
Capacity pressures lessened noticeably in service industries, but persisted elsewhere.
Employment intentions eased, as did recruitment difficulties, largely owing to developments in the business service sector.
Growth in total labour costs continued to point to stronger earnings growth than official data.
Annual input price inflation increased in the month, while output price inflation was little changed.
Annual consumer price inflation fell further, driven by discounting by retailers. Nonetheless, significant increases in some retail food prices were in prospect.