Bankers anticipate minor increases in business and consumer lending, but they expect some falloff in demand for real estate loans. Capital spending among area firms has been pared back, for the most part, although electric utilities are proceeding with expansion plans Manufacturing Third District manufacturers reported continued easing in new orders in April, but a steady rate of shipments. This marks a leveling off of the decline in shipments that began in January. However, order backlogs continued to fall. Most of the major manufacturing industries in the region experienced some respite from the first quarter's downward trend in shipments, but producers of chemicals and transportation equipment reported continued decreases.
Manufacturers continue to face high costs for fuels and electricity.
They report that their ability to raise prices for their products is limited by competition from Asian and European firms that benefit from the low value of their currencies in relation to the U.S. dollar. In addition, several firms indicated that their major customers were looking for price reductions as a condition of further purchases. Manufacturers expect business conditions to improve during the next six months. Firms in all major industrial sectors except chemicals, transportation equipment, and instruments expect increases in orders. Despite the forecasted increase in business, area manufacturers project no rise in order backlogs.