All respondents say that capital expansions are currently under way and will continue for many months. Looking forward, retailers expect steady, sustainable growth with low inflation through the first quarter of 1998. Manufacturing Three-quarters of the First District manufacturers contacted report that recent revenues are up from a year ago. Aircraft parts, computers and other business equipment, and furniture are showing the most rapid growth. However, some have adopted inventory management practices or production technologies that result in ongoing reductions in stocks.
Most respondents report that, overall, both materials costs and selling prices are essentially flat.
Plastic resin prices have risen dramatically, however, and minor increases are reported for chemicals, metals, and cotton. Domestic employment has increased in the range of 4 to 7 percent from a year ago at one-third of the manufacturers contacted. Most others report little change in headcount. Manufacturers generally cite average wage and salary increases in the range of 3 to 5 percent. Pay increases are greater for specialized technical and marketing occupations and are being augmented by bonuses and stock options at some companies.