Agents' Summary of Business Conditions - February 2010

• Over the Christmas and New Year period, retail sales were reported to be well up on the same period a year earlier. They had subsequently fallen back, with the adverse weather affecting sales across much of the United Kingdom.
• Housing market activity had continued to recover, but there were more signs that the rate of growth had slowed.
• While investment intentions remained muted, few firms planned a further round of sharp cuts following last year’s sizable reductions in spending.
• Exports had continued to recover modestly.
• Many contacts planned to maintain their inventories at low levels relative to sales.
• Reports of growth or stabilisation in demand for professional and financial services had become more common. But demand for other business services remained subdued.
• Reports of quarter-on-quarter growth in manufacturing output continued to outweigh those of shrinkage. Construction remained severely depressed.
• The Agents’ sense of marginal improvement in credit conditions had strengthened in recent months.
• The outlook for employment continued to improve slightly, with few contacts planning significant further reductions in headcount.
• Few contacts anticipated encountering capacity constraints over the near term.
• Inflation in per capita labour costs was expected to be positive but muted during 2010 (see box). Inflation in materials costs had ticked up and was expected to rise further.
• Consumer goods price inflation had increased following the reversal of the temporary cut in VAT and the reduced scale of promotional activity relative to the same period a year earlier.

Agents' summary of business conditions - February 2010

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