Several spoke of competitive pressures on pricing. Some contacts note difficulty filling information technology and other specialized positions, but few complain of labor market pressures. Salaries generally are increasing at an annual rate of 4 to 5 percent. Although most companies do not think demand for their services would be strongly affected by a possible slowing of economic growth, two contacts express concern regarding increased default risk on corporate bonds they hold. Residential Real Estate Residential real estate markets in New England remain strong.
Respondents continue to complain about lack of inventory throughout the region.
Most contacts report that brokers have more prospective buyers than listings to show to them. However, a prolonged period of price increases combined with high interest rates has discouraged some potential buyers. In Massachusetts this year, the number of sales has been lower every month than in the same month in 1999. Partly because of the change in mix, the average price of homes sold in Massachusetts increased 18 percent from first quarter 1999 to first quarter 2000. Prices rose more modestly in Rhode Island, Maine, and Vermont, with greater appreciation at the low end of the market than at the high end.