Wednesday, October 17, 2012
Activity in the housing market picked up slightly in the past
month, following the usual seasonal lull associated with the school
holidays, which had been exacerbated by the distraction of the
Olympics for potential buyers.
Contacts expressed concern though that this pickup would not be
sustained, as continuing worries about the economic outlook
restrained both potential buyers and sellers. Buy-to-let investors
still made up a larger proportion of property sales in the lower
stamp duty bracket, compared to before the recession. Would-be
homeowners and those near the bottom of the housing ladder were
still constrained by the lack of a sufficient deposit, credit and
Mortgage availability had continued to improve slowly, but
lending criteria remained tight. Sales of new houses continued to
fare somewhat better in comparison to the secondary market,
supported by government and developer initiatives, especially for
Business conditions summary
- Spending on consumer goods and services continued to grow at a
gradual pace. But the weather, together with sporting events over
the summer, had affected the type and timing of
- Activity in the housing market picked up slightly. Contacts
remained concerned though that this pickup would not be sustained,
as continuing worries about the economic outlook restrained both
potential buyers and sellers.
- Investment intentions continued to ease back, suggesting there
would be little change in the level of capital spending by firms
over the next six months.
- Export growth continued to slow, as euro-area demand weakened
- Turnover in the business services sector was still increasing
at a gradual pace.
- Manufacturing output slowed further and was now broadly flat on
a year ago. The slowdown appeared more widespread.
- Construction output continued to fall, as the slow recovery in
private sector activity remained below the scale needed to replace
public sector projects as they reached completion.
- For many companies the cost of borrowing appeared to be
stabilising, albeit at levels well above a year ago. Typically
larger firms had access to credit on good terms, but smaller firms
still struggled to secure credit. Overall, demand for credit
- Employment intentions indicated there would be little job
creation in the private sector over the next six months. In sectors
where growth remained stronger, firms were operating close to
capacity. Whereas in areas of persistent demand weakness, by
contrast, there was typically a higher degree of slack.
Manufacturers had seen capacity utilisation fall back recently, as
activity slowed.• Growth in labour costs per employee remained
- Non-labour input cost inflation remained subdued. But contacts
thought it less likely that inflation would fall further over the
rest of the year, following the recent price increases of oil,
cereals and some basic foodstuffs.
- Output price inflation had declined further, in response to
past falls in input costs and weaker demand.
- The fall in consumer price inflation had slowed, in part as a
result of renewed increases in energy and fresh food prices.