The District economy continues to operate at a high level. Contacts report little or no change in the level of economic activity since the last report and continue to be optimistic about the near term. Labor markets remain tight in much of the District. A few contacts noted some slowing of sales at the beginning of the year, but are now seeing renewed growth. Residential construction in 1996 was stronger than a year earlier in most areas, despite the usual slowing at the end of the year.
Commercial construction remains strong.
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.