The tourism sector reports that labor raiding is occurring and large wage premiums are being offered. Otherwise, wage rates are said to be either flat or increasing only slightly. With the exception of tourism, respondents report that consumer prices and vendor prices are holding steady. The fast pace of inflation in hotel room rates is expected to end in 1999, as new hotel construction will ease current room shortages. Lumber prices are reported to be declining.
Most contacts say profit margins are holding steady.
Respondents report that recent capital expansions have been completed and they do not plan any additional expansions over the next six months. Looking forward, retail contacts are cautiously optimistic for the holiday period, but report a great degree of uncertainty concerning the outlook for 1999. Most expect the current expansion to continue in 1999 but at a markedly slower pace. Segments with growing revenues include automotive and aircraft parts, furniture, and building equipment. Weakness is reported in apparel textiles, machinery, and components for electrical, electronic, and sports equipment.