Agents' Summary of Business Conditions - September 2012

• Spending on consumer goods and services continued to grow at a gradual pace. Promotions remained essential to support demand, with households still focused on finding value for money.
• The housing market had been subdued. That was partly due to the usual summer lull, with some contacts suggesting that activity may have been postponed due to the Olympics.
• Investment intentions suggested that the level of investment would be broadly unchanged over the coming twelve months.
• Export growth continued to slow, reflecting weakening conditions throughout the euro area.
• Turnover in the business service sector was rising at a gradual pace, as the volume of activity edged higher compared with a year earlier.
• Manufacturing output growth had slowed further and was broadly flat on a year earlier.
• The level of construction output continued to fall, due in large part to reductions in work for the public sector, along with some weather-related disruption to sites.
• The cost of borrowing was creeping upward as lenders passed on higher funding costs, although many banks were preparing to make use of the Funding for Lending Scheme.
• Employment intentions indicated that there would be little job creation in the private sector over the coming six months.
• Businesses in growth industries were often at full capacity. This was particularly evident among exporters, although there had been some easing in constraints due to slowing foreign demand. In areas of persistent weakness, by contrast, there was typically a rather more significant degree of slack.
• Growth in labour costs per employee continued to moderate. Contacts reported that there was relatively little upward pressure on settlements from staff.
• Non-labour input cost inflation had slowed further. But energy prices had begun to rise again recently, and prices of various cereals and feedstock had also increased in anticipation of poor harvests in both the United States and Europe.
• Output price inflation had declined, as easing cost pressures fed through the supply chain and weak demand weighed on firms’ pricing power.
• The annual rate of consumer price inflation remained fairly moderate, having fallen back in recent months.

Agents' summary of business conditions - September 2012

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