By contrast with these notes of caution, suppliers to the biopharmaceutical and transportation industries report that business remains strong and is accelerating in some cases. Manufacturers in the paper and textile industries express concern about recent increases in energy costs. Other respondents indicate that energy forms a relatively small fraction of costs and they cite few instances of other nonlabor input costs going up to any noteworthy degree. While makers of semiconductors and information systems report higher selling prices, most contacts are holding their selling prices steady. Office equipment manufacturers say competition has intensified downward pressure on prices.
Reports concerning labor markets vary.
Some respondents comment that salary pressures have eased or that labor availability has improved somewhat, and several are laying off employees. Three-fourths of contacts are giving average base pay raises of 2 to 5 percent. However, in some cases these contacts are absorbing much higher increases in health insurance costs or are paying out additional compensation to selected groups of employees. The remaining one-fourth are offering higher raises. For example, a couple of companies report that their growth is being impeded by more aggressive recruitment of their technical workers by competitor firms.