Agents' Summary of Business Conditions - May 2011

• The annual growth rate of retail sales values continued to slow, despite the elevated rate of inflation.
• Nominal spending on consumer services weakened further.
• Activity in the housing market had softened somewhat, attributed mostly to households’ concerns about further falls in house prices and uncertainty about earnings.
• Investment intentions pointed to a moderate pace of growth in capital spending over the next twelve months.
• Goods exports continued to grow quickly, driven by robust demand from emerging markets and developed economies, including Germany and the United States.
• Manufacturing output for the domestic market was growing more slowly than for exports.
• Demand for business services was growing at a modest pace.
• Construction output appeared broadly in line with a year earlier. Contacts remained downbeat about the outlook.
• Employment intentions pointed to continued job growth, but plans for further recruitment in consumer services were being revised down.
• Manufacturers were operating with normal levels of spare capacity, but there remained a degree of slack in the service sector.
• Total labour costs were rising at a moderate pace in both manufacturing and services.
• The cost of raw materials continued to rise rapidly, due to growing world demand and persistent supply shortages.
• The increase in the cost of raw materials — along with rising wages in Asia and higher transport costs — was pushing up the price of imported finished goods.
• Some of those increases in costs had been passed on in output prices, but many contacts felt that they had limited pricing power to do so.
• Consumer goods and services inflation remained elevated.

Agents' summary of business conditions - May 2011

• Agents' scores (xlsx)
• Definitions for the Agents’ scores
• Response to consultation on changes to Agents' scores