- Severe weather conditions had lowered the growth rate of household spending, with consumer services more adversely affected than retail sales.
- In the housing market, concerns about future income growth and the path of house prices were reported to be weighing on demand.
- Investment intentions pointed to a moderate pace of growth over the next twelve months, underpinned by firms’ efforts to improve efficiency and the need to replace existing capital.
- The Agents’ score for manufacturing export values reached a new series high, driven by trade with emerging markets.
- Services turnover growth continued at a modest pace, supported by rising private sector demand, but there was still downward pressure on fees.
- Foreign demand was providing a boost to manufacturing output, but conditions for domestic-facing firms remained weaker.
- According to contacts, the level of activity in construction was still subdued, and the outlook for growth was thought to be fragile.
- Credit continued to have become more widely available for large firms, but much less so for small ones, many of which were still focused on paying back debt.
- Private sector employment intentions rose further, with contacts in both manufacturing and services expecting to recruit, albeit cautiously.
- Capacity utilisation had returned to normal for many manufacturers. But contacts in services continued to report somewhat larger amounts of slack.
- Labour costs were rising at a rate approaching the pre-recession pace in manufacturing, but were increasing a little more slowly in services.
- Contacts continued to report increases in the cost of raw materials, and that had started to feed through to the price of imported finished goods.
- Higher input costs were apparent to some degree in manufacturing output prices, but the price of services remained under downward pressure.
- The pace of inflation in consumer goods was slightly higher than average, but was broadly in line with the average in services.
Agents' summary of business conditions - January 2011