- Annual growth in nominal spending on consumer goods and services had slowed to a very gradual pace.
- Subdued activity in the housing market reflected continued difficulties of first-time buyers to secure a mortgage and households’ rising concerns about incomes.
- Investment intentions had softened in recent months. Some capital spending that had been resumed after the recession had now been completed, and some plans had been put on hold because of increased uncertainty about the outlook.
- Manufacturing exports continued to grow steadily, although the Agents’ score had fallen back from recent highs, due to less-favourable base effects and a slowing in orders.
- Manufacturing output for the domestic market continued to grow, although the rate of expansion had declined in recent months.
- Business services turnover growth remained modest, with some niche service providers raising fees, and firms in the transport sector passing on higher fuel prices.
- Construction output was broadly flat compared to a year earlier, and slowing public sector orders and early indicators of private sector demand pointed to a contraction in activity over the coming year.
- Employment intentions in the private sector pointed to further growth in employment over the coming year. But the pace of recruitment was expected to slow somewhat, reflecting both past hiring, and downward revisions to the outlook for demand.
- Capacity utilisation remained a little above normal in manufacturing and somewhat below normal in services.
- There was reported to be little upward pressure on private sector total labour costs, in part because of employees’ rising fears about job security.
- The annual rate of increase in raw materials costs continued to flatten off, but higher energy prices were still feeding through as fixed-term contracts expired.
- Increased materials costs combined with higher labour costs in some emerging market countries continued to push up on the price of imports of finished goods.
- The pace of inflation in manufacturing output prices had slowed a little in recent months, while fees for services gradually edged upward.
- Annual inflation in the price of consumer goods and services remained elevated.
Agents' summary of business conditions - October 2011