Agents' Summary of Business Conditions - January 2010

• Over the Christmas period, most retailers had experienced stronger demand than during the same period a year earlier (see box).
• In most parts of the United Kingdom, the gradual pickup in housing market activity had continued.
• While investment intentions remained muted, few firms planned a second round of sharp cuts following last year’s sizable reductions in spending.
• An increasing number of contacts had reported growth in exports relative to the same period a year earlier.
• Many contacts planned to maintain their inventories at low levels after a bout of de-stocking earlier in the year.
• Business services and manufacturing output remained down on the same period a year earlier. While there were few reports of further contraction in recent months, there was no consistent sense of robust recovery in activity. Construction remained severely depressed.
• Credit conditions had eased during the second half of 2009, though that loosening had not been experienced uniformly across contacts.
• Few firms were planning actively for further material cuts in employment. But few were looking to recruit significant numbers of permanent staff — the typical response to any growth in activity being to reverse previous cuts to average hours or make use of temporary staff.
• Pay growth was expected to remain subdued through 2010. Inflation in materials costs remained low, but was expected to rise over the next year.
• Consumer goods price inflation remained low, but positive. Looking forward, most retailers planned to pass at least a part of the 1 January 2010 increase in VAT on to their customers (see box).

Agents' summary of business conditions - January 2010

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