Agents' Summary of Business Conditions - May 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 23 May 2012

Consumer demand had grown a little in recent months.
Activity in the housing market continued to rise.
Private sector investment intentions pointed to a small increase in capital spending over the coming year.
Goods export growth remained strong, particularly to emerging market economies.
Turnover in business services had improved a little compared with a year earlier, partly due to higher prices.
Manufacturing output for the domestic market continued to expand at a moderate pace.
There had been a further contraction in construction output, in large part due to declining work for the public sector.
For firms with strong balance sheets, credit was normally available on reasonable terms. But for some businesses there had been a rise in the interest rate spreads charged on loans over the past few months, and fees were also reported to have increased.
Private sector employment was expected to be broadly unchanged over the next six months.
In manufacturing, capacity utilisation was a little below normal, with most firms able to meet expected changes in demand comfortably. There tended to be relatively more slack in the service sector.
Labour cost growth remained fairly modest, and there were generally few signs of upward pressure on pay from employees.
Input cost inflation remained around its historical average. But the Agents’ score had edged up, as past increases in the price of oil fed through to a range of materials, and rising production costs abroad pushed up on import prices. Manufacturing output prices continued to rise at a moderate pace reflecting some pass-through of increases in costs. Business services inflation was subdued, but had picked up a little.
Consumer price inflation remained elevated.