BOE Agents’ summary of business conditions August 2016

posted in: Economy, Notes | 0

Brexit will affect certain aspects of the economy negatively

“Overall, respondents expected a negative effect from the vote on turnover, capital spending and hiring activity over the next twelve months…Across sectors, the expected effects on turnover were most negative for business services and construction.”

Softer business services

“Business services turnover growth had softened further, partly reflecting weakness in commercial property investment and other corporate transactions, such as merger and acquisitions activity…Activity in the commercial real estate sector had been materially affected by the referendum result, with the investment market in London particularly weak. Occupier demand had held up better.”

Slower growth in consumer spending

“Annual consumer spending growth had eased further, with unseasonal weather likely to have been a significant factor. Consumer caution had increased prior to and since the referendum, reducing demand growth for larger-value goods.”

The depreciating GBP has been a boon to manufacturing export volumes

 

“…for manufacturing there was a slight positive effect on balance, reflecting an expected boost to export demand from the fall in sterling. But exports overall were expected to be broadly unaffected, as that positive effect was offset by an adverse impact on services exports associated with lower commercial real estate and mergers activity by overseas investors.”