Some business service contacts reported lower sales due to the drought, the GM strike and weakness in the semiconductor industry. Temporary staffing contacts reported the tight labor market resulted in more unfilled orders and lower than expected sales. Transportation services contacts reported loads increased strongly for passenger airlines, moderately for trucking companies and slightly for air cargo shippers. For the rail industry, increased coal shipments offset smaller grain shipments caused by the drought and weak Asian demand for grain. Retail Sales Retailers reported continued strong growth in sales, except for sporting goods.
Contacts expect sales to remain strong but with downward price pressure from Asian imports.
One retailer said that wholesale prices in the spring of 1999 could be 2 percent to 3 percent lower than this year. Auto dealers reported increased sales compared to a year earlier. Financial Services Credit quality and consumer borrowing increased slightly, and several contacts reported declining loan delinquency and writeoffs. Demand for home and auto loans continued to increase. Increased building and commercial activity offset some of the drought-induced weakness in lending by rural institutions.