Employment levels are mostly said to be holding steady, with only a few retailers selling discount goods or autos reporting lay-offs. Labor markets have loosened and wages are now said to be flat, no longer rising. Retail contacts say they are holding their prices level and they are seeing only sporadic increases in vendor prices. Efficiency improvements are reducing costs for many retailers, with margins said to be increasing slightly. Retailers have turned cautious, with the majority of contacts saying that they do not intend to expand their operations in 2001.
Contacts expect economic growth to be slow for the entire first half.
Looking ahead to the second half of 2001, retailers are uncertain and anxious. They are concerned that recent stock market declines could severely affect consumer sentiment, yet they see consumers continuing to be buoyed by New England's high employment levels. About one-half of First District manufacturing contacts report that recent sales or orders are down relative to a year earlier. The remaining one-half indicate that business is flat or up. Half of the firms contacted express concern about excess inventories.