New orders and shipments were steady, but employment and working hours slipped. Order backlogs declined as well. There was little variation in business conditions across the range of goods-producing industries in the region. However, makers of industrial materials and equipment seemed to be facing a weaker situation. Several firms in these sectors reported that the high value of the dollar in relation to foreign currencies was hampering their exports and aiding foreign producers in competition for domestic markets.
Manufacturers expect basically steady activity in the first half of the year, on balance.
While some forecast gains in orders and shipments, others expect demand for their products to weaken further before rebounding. Producers of industrial and business equipment, in particular, say sales may not increase until well into the year. Despite the lackluster outlook, capital spending plans among area manufacturers remain fairly robust. Over one-third of the firms contacted for this report have scheduled higher outlays for new equipment and expanded facilities in the first half of the year, and only about one in ten have trimmed capital spending budgets. Manufacturers indicated that input costs continued to rise at the turn of the year, but reports of price increases appear to be less widespread than they were through much of 2000.