Selling prices also are mostly flat or down, with the exception of increases for construction products and modest upturns from cyclical lows for paper and integrated circuits. Most contacts continue to report average pay increases in the range of 3 to 5 percent and steady or declining headcounts. However, at an expanding biotech firm, pay raises are said to be twice this norm and recruitment has become more challenging. A couple of other contacts report a shortage of manual labor, but they differ on whether wage pressures are increasing. By contrast, another employer, experiencing significant layoffs, reports that most continuing workers will get no raise at all while new hires receive very attractive compensation packages.
Manufacturers report very mixed capital spending plans.
Various manufacturers point to recovery in Asia as a positive factor in their outlook. However, half of the contacts cite idiosyncratic factors that will limit their revenue growth, and some now see a need for greater emphasis on controlling costs. The residential real estate market in New England remains active. Low inventory levels continue to be the major problem in most areas. Higher interest rates and a lack of inventory are blamed for a reported decline in home sales in Massachusetts in the first half of 1999 compared to the same period last year.