The decline in business has affected almost all of the major goods-producing industries in the region. Makers of capital equipment have experienced serious declines in demand, although some manufacturers of lumber products and industrial equipment posted gains in orders. Food processing companies also reported some improvement. The high value of the dollar in relation to foreign currencies continues to be mentioned by Third District manufacturers as a constraint on their ability to counter foreign competition or expand exports. The high dollar has also prompted some firms to shift production overseas.
Manufacturers expect only very slight improvement in business conditions during the next six months.
Several indicated that they expect any upturn that takes hold to be only modest. On balance, the region's manufacturers have trimmed capital spending plans for the first half of the year. Some producers of industrial and business equipment reported that their customers were also canceling or indefinitely deferring expansion plans originally scheduled for this year. Retail Retail sales in the Third District were steady in February and slightly above the year-ago rate. In general, retailers said consumer confidence appears to be holding up, although some merchants noted that consumers seem to be reining in impulse buying and nonessential purchases.