Agents' Summary of Business Conditions - March 2009

• Retail sales values were down relative to the same period a year earlier. But demand had not contracted as sharply following the New Year sales as many retailers had feared.
• Investment intentions remained weak, primarily because of the depressed outlook for demand and the high level of uncertainty surrounding future prospects.
• Many contacts had reported shrinking export volumes. Weakness in world demand had outweighed any gains to competitiveness arising from sterling’s depreciation.
• Manufacturing output had continued to contract as firms ran down stocks. Construction and services output had also fallen relative to the same period a year earlier.
• Credit conditions remained a major concern for many firms.
• Labour demand had continued to shrink. Many firms had cut average hours, and there were widespread reports of actual and planned cuts to headcount. Growth in per capita labour costs had slowed.
• On average, there had been little change in the rate of inflation in materials prices. A special survey of the Agents’ contacts showed that there were significant differences between trends in the prices of energy, imported components and domestically sourced components (see box).
• Inflation in domestic output prices had eased further. The special survey on cost pass-through suggested that suppliers were encountering resistance to pass-through of any increases in costs, while being pressured to pass on any cuts in costs.
• Inflation in imported finished goods prices remained elevated. There were some signs of pass-through to retail food prices, but less widespread evidence for other goods prices.

Agents' summary of business conditions - March 2009

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