The tourism industry is also robust. In all sectors, inventories are at desired levels. However, these contacts say their Asian mail order business may be bottoming out and the loss of Asian tourists is being offset by increased business from Europe. Retailers indicate that employment is generally level, increasing only with store expansions. Wage growth has picked up a notch from the earlier 3 to 5 percent range to a 4 to 7 percent annual pace.
Respondents say prices and gross margins are holding steady.
The exception is hotel room rates, which continue to show sizable increases. A majority of retail contacts say significant capital expansions are either planned or in progress. Looking forward, most retailers express cautious optimism. Manufacturing Half of the First District manufacturers contacted indicate that recent business is up from a year ago, as compared with three-quarters of those responding seven weeks ago. Of the remaining respondents, about equal numbers report flat trends and declines.