1974 District reports present a mixed picture, with elements of weakness generally overshadowing those of strength. There are scattered indications that shortages and bottlenecks are breaking up in some sectors, although shortages of certain industrial goods remain critical. Many firms have been critically reexamining their capital spending plans, and some have scaled back such plans, not only among public utilities but in some other sectors as well. Similarly, more cautious inventory policies seem to have been adopted by some firms. Consumer spending on appliances continues sluggish, but demand for the remaining 1974 model automobiles appears to have strengthened.
Residential construction continues to languish.
Inflation remains a serious concern, especially in light of recent estimates of a significant drop in the expected harvest of certain key agricultural commodities. Regional differences in the state of overall economic activity were reflected in the District reports. Activity was described as sluggish and slowing by Philadelphia and Richmond, respectively, while Minneapolis reported that prospects were not as promising as earlier in the year. On the other hand, manufacturing activity was reported strong by St. Louis and San Francisco, and Dallas reported that factory orders are generally running ahead of year-ago levels. Capital spending plans are being subjected to increasingly critical scrutiny, and some cut-backs were reported even outside of the public utility sector, where deferrals and cancellations of capital investment projects are widespread.