The increases are largely for business services and consumer products. Manufacturers do not anticipate much change in overall employment levels in 1997. Demand is rising for professional, sales, and services employees, while productivity gains are limiting the need for production workers. Most contacts indicate pay increases of 2 to 4 percent in 1996, with similar raises projected for 1997. Compensation packages are escalating more for high tech workers and some managers.
Companies report aggressive competition to hire hardware and software engineers.
Health care and other benefits do not appear to be creating much, if any, cost pressure, especially with the continued adoption of managed-care health plans. Most manufacturers expect a positive macroeconomic environment in 1997, although some mention a stock market correction or consumer indebtedness as possible sources of weakness. One-half of the respondents have aggressive capital spending plans. The commercial real estate market in New England has not changed much during the last quarter. Massachusetts continues doing extremely well, Maine is still relatively weak, and activity levels in the other states in the region remain between those two.