Looking forward, retailers expect moderate growth continuing through the first quarter of 1998. However, a significant minority of retailers mention the possibility of the stock market and international events negatively affecting growth prospects for next year. Most of the remaining firms cite revenue or order gains in the range of 10 to 20 percent. Although manufacturers are continuing to experience strong trends for furnishings, some computer products, and aircraft parts, a number of contacts are disappointed by recent demand for electrical, electronic, consumer, and medical goods. Holiday sales in the U.S. are expected to be solid but not outstanding.
Manufacturers indicate that most materials costs are flat to down.
However, high-grade lumber prices are considerably higher than a year ago and expected to increase further as a result of strong demand. Contacts are also paying higher prices for packaging, upholstery materials, and natural gas. The remainder report that selling prices are flat to down as a result of competition, resistance on the part of retail chains, or productivity gains. A sizeable minority express concern that competition will exert further downward pressure on prices. With some exceptions, employment at respondent firms is holding steady.