Manufacturers cite rising costs for oil and gasoline, paper, copper, and furniture-grade lumber but reductions for electronic components. Most selling prices remain flat, and many contacts cite increased operating efficiencies or improved cost management techniques as being helpful in avoiding the need to raise prices. However, prices reportedly are rising somewhat for paper goods, consumer products, and industrial machinery. Prices of aircraft equipment are falling. One-third of the respondents are reducing their head counts substantially as part of restructuring efforts.
Employment changes at most other companies are fairly small.
The majority of respondents indicate that average pay raises remain in the range of 3 to 5 percent, but a growing fraction report higher increases. Contacts indicate that tight labor markets have raised workloads for existing employees and increased the need to reward key personnel. Finance, accounting, information technology, research and development, and sales and service openings reportedly are the hardest to fill. All contacts expect business either to be good or to show improvement this year. However, many point to at least some degree of uncertainty arising from their own restructuring efforts or those of competitors or customers.