Uk businesses expect a gradual recovery in sales, investment and employment during the second half of 2021.
Respondents to the August survey expected UK sales to grow by 12% on average over the next year.
The latest Agents’ summary of business conditions was published on 23rd September. The Bank of England regularly publish a summary of reports following discussions with at least 700 businesses across the UK every reporting period.
It reported that output continued to rise overall, but was constrained by materials and labour shortages in some sectors. Labour shortages became more widespread and acute; pay settlements crept up. Growing reports were made relating to rising costs being passed through to prices; some costs seen nearing their peak.
Consumer spending continued to grow in Q3, supported by online sales and domestic tourism. Online spending remained robust, retail sales grew due to the re-opening of non-essential retail outlets although footfall was a long way down on pre-pandemic levels.
Business services activity grew at a steady pace, some companies reporting turning away work due to staff shortages.
Manufacturing demand remained strong, but output growth slowed due to shortages of materials, components and labour. Supply-chain issues were reported to have constrained growth in exports. And there were some ongoing reports of EU customers rotating away from UK suppliers following Brexit.
Construction output remained ahead of pre-pandemic levels, but there were reports of materials and some labour shortages limiting activity.
Investment intentions continued to be positive, supported by new spending as well as paused projects being re-instated.
Corporate financing saw demand for new bank credit subdued, but supply-chain issues and rising input costs have led to increased demand for working capital finance among smaller companies.
Property markets saw demand for housing outstrip supply; further recovery in investor demand for commercial property has been reported.
Employment intentions picked up, and recruitment difficulties increased sharply and became more widespread, leading to some upward pressure on pay.
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