Agents' Summary of Business Conditions - October 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 October 2007

Growth in the value of consumer spending slowed further, reflecting aggressive discounting.
Demand for housing also eased further in most parts of the United Kingdom, though it was too soon to gauge the extent to which this slowing had been amplified by changed credit conditions.
Investment intentions fell from their earlier high levels, driven by developments in the service sector. These predated recent financial turbulence, which has had limited effect on investment decisions so far.
Total demand for exports remained generally buoyant.
Growth in manufacturing was solid, and that in construction remained very strong. However, service sector output growth continued to ease.
Capacity pressures lessened noticeably in service industries, but persisted elsewhere.
Employment intentions eased somewhat, largely owing to developments in the service sector. Recruitment difficulties persisted, but became slightly less pronounced.
Growth in pay awards remained well contained and that in total labour costs eased further.
Annual input price inflation fell in the month and output price inflation rose, supporting further margin recovery by manufacturers.
Annual consumer price inflation ticked down. While discounting by major retailers restrained goods price inflation overall, recent floods and rising commodity prices were putting upward pressure on retail food prices.

Agents' summary of business conditions - October 2007