Employment is said to be either increasing moderately or holding steady. Most contacts report that labor markets were tight during the holiday hiring period, with employers encountering difficulty in finding, attracting, and retaining employees. Permanent staff levels appear to be holding steady, with highly skilled computer programmers being the primary occupation with shortages. Among retailers reporting tight labor markets, half are offering wage premiums as one device to hire and retain help, although one contact said such premiums were ineffective. In general, wages are said to be increasing at a 3 to 5 percent annual rate, with selective premiums adding another 5 to 10 percent for specific individual employees.
Most respondents report that prices are holding steady.
The exception is tourism, where excess demand for hotel rooms in Greater Boston has led to significant price increases. Materials costs are also said to be holding steady, except for paper products, for which prices are rising. Half the contacts say profit margins are either level or increasing slightly. The other half report slight declines in margins, suggesting that rising wage costs may be more than offsetting productivity improvements. Most contacts have modest capital expansions planned for 1998.