Agents' Summary of Business Conditions - March 2013

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 20 March 2013

Annual growth in the value of retail goods and services was reported to have remained modest.
There had been further signs of an increase in housing market activity, supported by reductions in mortgage costs. Some contacts thought that the effects of the Funding for Lending Scheme (FLS) had become more evident on the pricing and availability of higher loan to value ratio mortgages.
The cost of credit was reported to be falling for some firms, though not for many smaller companies. Improvements in credit availability remained mostly confined to larger businesses and credit demand remained weak.
Investment intentions had edged higher, which was said partly to reflect improved confidence amid diminished uncertainty about the near-term global outlook.
Growth in exports of goods had edged up and perceptions of the outlook for export demand had improved.
Manufacturing output for the domestic market remained slightly lower than a year earlier, though forward-looking sentiment had improved.
Output of business services had ticked up, with some increase in mergers and acquisitions and financial market activity.
Construction output remained subdued, though there were reports of a slight strengthening in private homebuilding activity by larger firms.
Employment intentions had edged higher in business services but were broadly flat for manufacturing, consistent with the pattern of output in those sectors over the past year.
Capacity utilisation remained a little below normal. There were few reports of recruitment difficulties outside of information technology and engineering.
The rate of growth in labour costs per employee remained subdued, though some firms reported increasing pension costs.
Inflation in material costs and finished import prices was unchanged.
Output price inflation remained muted.
The rate of inflation in retail goods and services prices had edged up.