Agents' Summary of Business Conditions - January 2008

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 21 January 2008

Consumption growth remained well below its rate earlier in 2007. Growth in the value of Christmas sales was also less than at the same time a year earlier, and retailers resorted to extensive discounting. See the box on the Agents’ retail survey.
The easing in demand for housing continued, and house price inflation fell.
Investment intentions fell further, with weaker intentions evident in both the services and manufacturing sectors, in part reflecting tighter credit conditions.
In contrast to the slowdown in domestic spending, demand for exports remained buoyant.
Growth in manufacturing was solid. Growth in construction and service sector output slowed further, albeit from high levels, so that growth in aggregate output also slowed.
Employment intentions fell, and recruitment difficulties eased somewhat.
Capacity pressures lessened, especially in service industries.
Growth in total labour costs remained well contained, with little change expected in 2008.
Annual input price inflation was unchanged in December following a rebound in preceding months. Annual output price inflation was unchanged.
Annual consumer price inflation increased, with the effects of non-food discounting more than offset by increases in the prices of fuel and food.