Agents' Summary of Business Conditions - July 2012

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 18 July 2012

There had been a slowing in the annual growth rate of consumer demand, with contacts reporting that confidence had dipped due to worries about the economic outlook.
There had been further signs of weakening in the housing market.
Investment intentions had softened a little, but remained positive, and there was a general sense of stepping back from expansion plans.
Export growth remained strong but had slowed further on the month, in large part due to weaker demand in the euro area.
In the business services sector, turnover continued to edge higher, but the annual rate of growth had slowed a little over the past few months.
Manufacturing output growth had weakened somewhat, after having picked up during the spring. That was mainly down to the slowing in export growth.
There had been a further decline in construction output compared with a year earlier, in large part due to weakness in public sector spending.
Contacts continued to report that loan rates and fees were rising when facilities came to be renewed. And small firms were still often struggling to secure credit.
Private sector employers did not expect much change in staff numbers over the next six months.
There was a small margin of spare capacity in the manufacturing sector. There was a somewhat greater degree of underutilised labour and capital in the service sector.
Labour costs continued to grow at a moderate pace, with settlements tending to be a little higher in the manufacturing sector than in services, due largely to its relatively stronger performance over the past year.
Materials cost inflation eased further, with the prices of various commodities having levelled off, or even fallen in some cases.
Manufacturing output price inflation continued to slow gradually, as the impetus from rising input costs began to wane. There was very little upward pressure on the price of business services.
Consumer price inflation had slowed a little further on the month.