Loans outstanding at large District banks have declined slightly since the start of the year. Surveys of District employers indicate that prospects for employment gains, although mixed, are expected to be less favorable in the second quarter of 1997 compared with the same period in 1996. State sales and income tax receipts for the last three months of 1996 showed strong growth compared with the last three months of 1995. Overall, District contacts report little change in sales and employment levels since the last report and remain optimistic about their near-term prospects. Contacts are concerned that continued tight labor markets will hamper their ability to hire new employees.
Construction workers are very scarce, especially in southern parts of the District.
Many contacts report stable sales levels overall since the beginning of the year, although some experienced a slight slowing early on that appears to be reversing itself. For example, a contact in the heating and cooling industry reports that orders have recently slowed somewhat, but the industry is currently building inventory for the upcoming cooling season, its strongest season. A firm that manufactures oil reclamation equipment is seeing orders delayed because of bottlenecks and postponements by its customers, many of whom are overseas. Several contacts, particularly from the poultry processing industry, report temporary production delays, as ice and extremely cold temperatures earlier this winter prevented employees and deliveries from reaching plants. The furniture industry reports strong sales, especially for wood furniture.