Agents' Summary of Business Conditions - May 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 15 May 2008

Consumption growth remained well down on rates of six months ago.
Weakness in housing demand intensified.
Investment intentions fell sharply further in the services sector, and eased across most industries. Tighter credit conditions continued to weigh on investment plans, with more companies being directly affected by changes to the cost or availability of finance.
Demand for exports remained robust, though there was a slight easing in orders growth.
Growth in domestically orientated manufacturing fell, as did growth in construction and services sector output.
Labour demand softened noticeably, with a marked fall in employment intentions in the services sector. The inflow of migrant labour was reported to be slowing and recruitment difficulties eased.
Capacity pressures lessened and were expected to be below average for the next six months.
Growth in total labour costs remained well contained, though there were more reports of modest upward pressure on settlements in response to increases in the cost of living.
Annual input price inflation rose sharply and annual output price inflation increased as manufacturers sought to restore margins.
Annual consumer price inflation also increased.