- There had been some signs that consumer spending growth had slowed through Q2.
- Activity in the housing market, which had been rising gently for much of 2010, had also eased back.
- Investment intentions remained consistent with a gentle rise in spending, rather than a more robust recovery.
- Export volumes rose at a steady pace, with a growing number of contacts selling to new, fast-growing markets.
- Services turnover had continued to grow modestly, reflecting higher demand for professional services, as well as a small increase in distribution activity.
- Manufacturing output had risen further, on the back of stronger external demand and, to a lesser extent, domestic demand.
- Construction output had been little changed in recent months. But the level of activity remained lower than a year earlier, and contacts feared a further contraction over the next year or so.
- Credit conditions remained tight for many firms, although the Agents sensed that the availability of funding had improved a little during 2010.
- Contacts expected a small increase in private sector employment over the next six months, but public sector employment was expected to fall.
- Pay growth remained muted overall, although the upward creep in wage settlements noted in the past couple of months had continued.
- Businesses’ input costs had risen further, reflecting increases in global demand as well as some supply shortages for certain components.
- Corporate margins had, on balance, been little changed over the past year (see box).
- Consumer price inflation remained elevated. Most contacts had expected a rise in VAT to be announced in the June 2010 Budget, but it remained too early to assess the degree to which the rise would be passed on to consumers.