A slight majority of First District manufacturing contacts indicate that recent sales or orders are up relative to a year earlier. Further, among respondents reporting growth, several indicate that business has slowed recently. Most manufacturers indicate that they are cautious about prospects in 2001, with some anticipating a weak first half. Makers of consumer products report, at most, modest revenue growth, and they are bracing for a deterioration as wholesale and retail business customers reduce their inventories or undergo consolidation. Some firms have double-digit gains in sales or orders from a year ago for these products.
Contacts make widespread mention of higher energy costs.
For many, fuel and freight bills are way up from a year ago. Selling prices are mostly flat or rising at low single-digit rates. Contacts continue to claim savings associated with aggressive purchasing programs, long-term contracts, or productivity enhancements. However, they are making more frequent references to a squeeze on profits associated with higher input costs, plans to raise selling prices in order to recoup higher costs, or a more cautious stance with respect to capital spending in order to contain costs. Almost half the group mention cuts in temporary staffing or layoffs at their own firm.