A textile manufacturer detects a small improvement in apparel retailing, after several slow years. Several respondents mention adverse effects of foreign imports. For example, a maker of high-quality furniture notes that while his own business is thriving, the U.S. furniture parts industry is shrinking because of competition, especially from China. Automotive suppliers indicate a need to develop other products because carmakers increasingly are turning to low-cost offshore suppliers. Exporters tend to be experiencing slow business in Europe, but rapid growth in Asian markets.
Most manufacturers report that overall materials prices are similar to or lower than a year ago.
Chemicals prices are rising, but contacts indicate that the increases are selective or smaller than a year earlier. About one-half of the contacts report that their selling prices remain unchanged. However, a maker of consumer durables recently raised prices by 7 percent, and several nondurables manufacturers, including firms in the paper products industry, report price increases in the 3 to 4 percent range. In contrast, a machinery manufacturer whose business has recently slowed has instituted a temporary price reduction for one product line. Currently, more respondents are adding than are cutting employment, but contemplated changes generally are modest.