The Bank of England recently issued an update on the overall business conditions in the UK covering business activity in most sectors as well as consumer spending.

It said that growth in activity had held steady at a modest pace.

It noted that professional services companies reported a pickup in growth and that goods export volumes had strengthened, although output in construction had continued to slow.

Going forward, companies’ intentions on investment remained positive, mainly though, in areas that maintain business activity.

Businesses reported that whilst pay growth had picked up, recruitment difficulties remained at a high level.

Spending by consumers in retail sales had remained broadly steady but growth had changed very little. The new car market remained challenging and consumers were buying less in the way of furniture and home goods. The growth in consumer services turnover continued to be helped by inbound tourist spending and domestic consumers discretionary spending showed signs of softening.

In the business services sector, turnover remained moderate but had picked up slightly. Growth was supported by an increase in mergers and acquisitions activity, property transactions, and continuing strength in overseas demand for professional services.

The Bank of England went on to say,

‘Spending on IT services also remained strong. Manufacturing output growth had remained moderate. Export volumes growth had increased, supported by strong global demand and the fall in sterling. The latter had led to some, albeit still limited, switching from overseas to cheaper, domestically produced goods. Activity in the oil and gas sector had picked up. Construction output growth had eased, with growth in housebuilding offset by flat or falling activity in other parts of the sector. Investment intentions remained positive, but mainly reflected the investment needed to maintain business activity and improve efficiency. This included investment in automation, artificial intelligence and robotics.

Outside London, investor demand for UK commercial real estate remained broadly unchanged, with demand modestly above supply. There was strong demand for distribution space, while demand for non-prime retail property had softened. Investor sentiment remained comparatively weaker in London, weighed by concerns about stretched property valuations. Housing market activity remained subdued with transactions steady at a low level, reflecting weak supply and demand. Within that, the new-build and rental sectors were buoyant, pushing up prices and rents. Housing demand was particularly weak in London and the South East, especially for the most expensive properties.’

The full report can be seen on the Bank of England’s website.