- The rate of growth of spending on consumer goods and services had slowed further.
- The housing market had weakened somewhat in recent months, but contacts were uncertain whether that reflected temporary factors.
- Contacts’ plans for capital spending had softened and the level of investment was expected to grow only very modestly over the next six months.
- Export growth had moderated significantly, largely due to weakness across the euro area.
- The pace of growth of turnover in the service sector had slowed further.
- Manufacturing output growth had eased and the level of activity was only slightly higher than a year earlier.
- Construction output continued to contract, due in large part to the dwindling pipeline of public sector work. Recently, temporary factors had also pushed down on the level of activity.
- Credit conditions remained polarised between those able to borrow at reasonable rates and those unable to secure finance at a cost that was acceptable.
- Employment intentions remained fairly flat. In an uncertain environment, businesses were hesitant about committing to changes in payroll until the outlook became clearer.
- Capacity utilisation in the manufacturing sector was a little below normal, while there was a significant degree of spare capacity in services.
- The rate of growth of labour costs per head remained restrained and had fallen in recent months.
- Inflation in the cost of raw materials continued to moderate, in large part due to weakening demand growth in the rest of the world.
- The pace of inflation in manufacturing output prices was declining in response to softening cost pressures. Taken as a whole, fees for business services were broadly unchanged from a year earlier, in large part due to persistent spare capacity in much of the sector.
- Consumer price inflation continued to fall back towards the 2.0% target.
Published on
15 August 2012
Agents' summary of business conditions - August 2012Other Agents' summary of business conditions
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