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mpc: 12 improvement in domestic orders. While reports of manufacturing firms locating new capacity overseas continued, there had been announcements of substantial new investment plans in the energy sector, reflecting the higher oil price. A48 Annual retail sales value growth had continued to ease slightly according to the Agents, though volume growth had been maintained. Contrary to the expectations of some contacts, there had been little improvement in motor vehicle sales during September. A49 The Agents continued to report that the most significant input price increases had been for oil and gas. But most price rises continued to be mitigated to some extent by increased importing, efficiency gains and more effective purchasing strategies. Competitive pressures on manufacturers' output prices continued to be reported. A50 The labour market picture had remained similar to recent months. Skill shortages remained an important concern, but most contacts suggested that they had been no worse than in recent months. Pay growth in manufacturing was reported to have remained broadly unchanged, despite earlier concerns of rising pressures. Upward pay pressure on service sector pay growth remained, although annual growth had been restrained by lower bonus payments than last year. A51 The Agents had undertaken a survey of around 200 firms regarding their use of full-time labour, to try to explain the gradual decline in full-time average working hours seen since early 1998 in the official statistics. The majority of respondents suggested that the average working hours of their full-time staff had been broadly unchanged compared with a year earlier and there had been little evidence of any significant sectoral differences. Moreover, most companies had expected average hours to remain unchanged over the remainder of the year. With regard to the management of short-term fluctuations in labour requirements, widespread use of overtime had continued, particularly for small firms. Around a third of firms reported greater use of temporary and part-time labour, while around a quarter had made more use of flexible working hours. These trends were said to be particularly evident in the service sector, where labour market pressures had been relatively tight. Though only around 10% of firms reported an increase in the use of contracts