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VI

Reports by the Bank's Agents

A41 The Agents reported that manufacturing output growth had slowed further, with falls in outputin the information and communications technology (ICT) sector. Export growth had slowed, mainlyas a result of lower orders from the United States, though there had also been some signs of weakerdemand from Germany and parts of Asia. Overall, business confidence in the manufacturing sectorhad deteriorated. A42 Construction output growth had continued to rise, following earlier weather-related disruption.Public sector construction had been increasing steadily in many regions. Demand for commercialconstruction had remained buoyant, particularly in the retail sector, and the Agents reported thatdemand for residential construction had also strengthened. A43 The rate of growth in business services output had continued to ease, mostly due to the furtherslowing in financial services and ICT activity. There had been some evidence of stabilisation ingrowth of consumer services activity. Demand for tourism-related services had remained lower thana year ago, though contacts had reported some recovery since Easter. A44 Investment intentions had weakened overall, according to the Agents. This had beenparticularly so in the ICT sector and for US-owned companies, with frequent reports of delayedexpansion plans. Service sector investment spending had remained more robust than inmanufacturing, particularly in the retail sector, though investment plans had softened somewhat,mostly due to the US slowdown. A45 The Agents reported that moderate growth in retail sales volumes had continued in most regionsand that consumer confidence had remained strong. Spending on new and used cars had continued torise. A46 There had been further evidence of slower service sector employment growth and declines inmanufacturing employment. Skill shortages, though still a significant concern, had eased recently.Contacts had continued to suggest that the overall impact of changes to the National Minimum Wagewould be small. A47 The Agents had conducted a survey of UK firms regarding stocks. Overall, a net balance offirms had reported that their stock levels had been higher than expected in 2000 Q4 and 2001 Q1.This had been evident across all sectors of the economy with the exception of construction, wherestock levels had been reported as lower than expected. On average, firms in most sectors had thoughtthat their current stock levels were a little too high and planned to reduce them slightly over thefollowing six months. The exceptions were construction and motor traders. Construction firms had