Retailers report that capital expansion plans have not changed since the first of the year. Looking forward, most contacts say that they expect steady economic growth to continue for the next six months, but they also express great uncertainty about the outlook beyond six months. They state that the future strength of the economy depends upon continuing growth in equity prices along with stable interest rates. Manufacturing and Related Services Most District manufacturing contacts report that recent business is up at a single-digit rate from a year ago. The strongest trends are reported for medical and automotive equipment, construction supplies and tools, printing and publishing, and equipment servicing.
Contacts indicate declining demand for aircraft parts, machine tools and lighting equipment.
Makers of consumer goods and component parts say that Asian demand for their products is increasing. However, most suppliers of heavy capital and construction-related equipment say their Asian sales remain sluggish. Most other materials costs remain steady. Manufacturers' selling prices are little changed for the most part, and some equipment and machinery prices continue to fall as a result of customer pressures. By exception, a manufacturer of residential building materials and a food processing firm report price increases in the range of 3 to 5 percent because of higher input costs.