Excess capacity and slack demand have led to falling prices for key products like ethylene, propylene and polypropylene. Paper producers reported large inventories as a result of slower than expected demand, and many companies have taken extra maintenance downtime to try to prevent overproduction. Cement and concrete inventories are back to normal after shortages earlier in the year. Wood prices are expected to continue to decline because demand has fallen and supplies are high. Retailers said selling prices continued to be mostly unchanged despite some increased cost pressures, such as from transportation and energy.
Most contacts say labor markets remain very tight, leading to increased overtime and rising wages.
Some contacts, however, reported a loosening in the labor market. Manufacturing Manufacturing activity slowed since the last Beige Book, and many contacts were gloomier about the outlook than they have been for quite a while. Demand fell for producers of cement, concrete, glass, paper, petrochemicals, primary metals, lumber and other wood products. For most products, contacts said the slowdown was greater than the normal seasonal slowing and some were quite concerned. Slower sales of paper products, especially corrugated paper and boxes, led contacts to conclude that retail sales will be slow this Christmas.