Heavy reductions in stocks (particularly in the second half of 1980), which in turn have been a major factor behind the trade surplus, have characterised the recession so far. Companies have also been forced to save labour and, especially in manufacturing industry, to curb spending on capital equipment. These cuts in spending are in part a response to the squeeze on profits and on the financial position of companies, with the high exchange rate making it difficult for cost increases to be recovered by an increase in prices. Consumer spending, on the other hand, has remained steady, sustained by recent rises in disposable income. Pay settlements have moderated substantially since last autumn.