Agents' Summary of Business Conditions - December 2009

• Consumer spending had grown relative to the same period a year earlier.
• In most parts of the United Kingdom, the gradual pickup in housing market activity had continued, but the volume of transactions remained well down on pre-crisis norms.
• Investment intentions remained weak (see box), with many firms planning to hold or reduce spending a little further during 2010. But throughout the fourth quarter, there had been more exceptions to that weak picture than had been the case earlier in the year.
• There had been a further improvement in the tone of recent reports from exporters as global demand — particularly from Asia — had picked up and sterling’s depreciation was more widely seen to be boosting export orders than was the case earlier in the year.
• Most contacts had completed any material downward adjustment of their stocks, but remained cautious about rebuilding inventory.
• Business services turnover and manufacturing output remained down on the same period a year earlier, but with few reports of further contraction in recent months. Construction activity remained severely depressed.
• The pace of decline in employment had eased through the second half of 2009, and few firms were actively planning for significant future cuts. Those firms that were planning for their 2010 pay settlements expected pay growth to remain subdued.
• With few contacts anticipating any marked increase in demand over the next few months, capacity constraints were rarely regarded as a concern.
• Inflation in materials costs appeared low. But the majority view among contacts was that inflation was likely to rise as global demand recovered.
•  Consumer goods price inflation remained low but positive.

Agents' summary of business conditions - December 2009

• Agents' scores (xlsx)
• Definitions for the Agents’ scores
• Response to consultation on changes to Agents' scores