On the downside, apparel, discount, and appliance retailers report sales 3 to 8 percent below year-earlier levels. Inventories are generally in line with sales. With the exception of stores selling building materials and home furnishings, which expect sales to grow 15 percent, and discount and appliance retailers, who see ongoing consolidation contributing to continued losses, First District retail contacts expect moderate, sustainable growth to continue through 1997. Retail employment is reported to be fairly level, and most retailers are expanding capital moderately. The exception is building materials and furnishings stores, which are expanding their work forces and making major capital investments.
All contacts report rising employee turnover and increased difficulty replacing workers.
Wages are said to be rising about 4 percent. Respondents report that they are holding their prices steady, largely because competitive pressures constrain their ability to raise them. Manufacturing Most First District manufacturing contacts report that recent sales are above the levels of a year earlier, with just over one-half indicating growth as high as 8 to 20 percent. Strong gains are reported by makers of automotive, general industrial, and computer equipment, as well as furniture. Manufacturers note some signs of turnaround in commercial aircraft and semiconductor markets.