Most First District manufacturing contacts indicate that recent sales or orders are up relative to a year earlier. A contact making parts for communications devices reports that a large customer recently cancelled an order. A couple of manufacturers of consumer instruments express disappointment that sales are no higher than year-earlier levels. Close to one-half of the manufacturing contacts say that parts shortages or capacity constraints either have caused production delays recently or are expected to cause delays in coming months. Items in short supply include electronic components, some metals, and oil derivatives.
Manufacturers indicate that they are paying much more for plastics and fuels.
There are also reports of upward cost pressures for paper, chemicals, metals, and postal and shipping services. Some contacts have managed to reduce input costs by finding alternative suppliers or holding on-line auctions. About one-third of the contacts report that they have raised prices or will do so shortly. However, manufacturers selling to large retail chains or automakers indicate that these customers are forcing them to constrain or reduce their prices. Employment is largely flat or up modestly, although some firms in technology industries are expanding rapidly.