By contrast, a maker of industrial machinery, a paper manufacturer, and several companies selling to the computer and electronics industries express disappointment with recent results or see signs of slower activity ahead. Exporters indicate that Asian business has slowed, mostly in line with expectations. One reports rising liquidity problems for Asian customers, particularly smaller firms. A couple of contacts point to continuing risks due to structural problems in the Chinese and Japanese economies, although another firm indicated that its sales to China remain strong. European sales have picked up smartly for most contacts, although less so for consumer products than for capital goods.
Most manufacturers indicate that their materials costs and selling prices remain generally stable.
However, computer memory prices are falling dramatically and paper prices are slipping. One contact indicates that some materials prices are so low as to provide stockpiling opportunities. On the other hand, other manufacturers mention cost increases related to tighter commercial real estate markets and rising prices for furniture-grade lumber. About one-third of the contacts have been able to raise their prices in the range of 2 to 4 percent for products in strong demand or products with new features. Most contacts have been holding U.S. employment steady or hiring only selectively and they generally expect to continue in this mode.