They are expected to sell off their extra inventory, prompting demand to pick up by the end of the fourth quarter. Heavy-truck manufacturers report a slight increase in orders, but unless orders increase dramatically, industry sources anticipate layoffs due to the rapid diminishment of unfilled order backlogs. Construction equipment orders remain strong, especially in highway and residential construction. Durable goods production is described as good, with strong export markets. Orders for semiconductor manufacturing equipment continue to grow at very high rates.
Manufacturers report that export markets in Asia are experiencing strong growth.
Despite higher fuel prices, transportation and shipping companies across the District report increased business relative to a year ago. Some firms report that they have passed some of the increases on to their customers as temporary fuel surcharges. As in other sectors of the economy, firms involved in transportation and shipping indicate a persistent inability to secure qualified workers. One contractor told of being understaffed for the last five years. Some contacts reported operating successfully with new policies that allow lower inventories.