A similar percentage of firms reported high levels of capacity utilization as in the previous survey. Material availability problems were generally small. Some firms, however, continued to experience difficulties obtaining steel products and electronic components and lead times for these materials edged up. A few managers also reported a decline in service due to supplier consolidation. As a result of this consolidation, firms in some industries have banded together into purchasing associations in order to obtain better service and larger price discounts.
Most managers plan to continue trimming inventories in coming months.
Real Estate and Construction Nonresidential building activity remained solid, but housing activity continued to slow. Homebuilders reported another reduction in housing starts, with activity in some places down as much as 20 percent from last year's record pace. Construction of high-end and multifamily dwellings, on the other hand, remained strong in several parts of the District. Expectations of future residential building were rather subdued. In contrast to starts, home sales experienced a modest increase and were slightly above year-ago levels.