In summary, retailers see a strong economy and expect solid growth to continue during the next six months. Most of the remaining respondents indicate that sales are flat or up a little. One-quarter of the manufacturing contacts are facing capacity constraints. Strong gains are reported for biotech instruments, telecommunications and computer networking equipment, and some categories of electric utility equipment. Aircraft equipment sales are reported to be recovering, while home appliance, automotive equipment, and machine markets are softening after several strong years.
Most contacts report that materials costs are flat or down somewhat.
Some contacts have avoided metals price increases by entering into long-term contracts. Selling prices also remain largely flat, although higher costs for hardwoods are putting upward pressure on furniture prices. Automakers reportedly are forcing lower prices and profitability onto equipment and parts manufacturers. Price trends for computer products vary considerably, depending on shifting demand for different technologies. Most respondents report very little net change in their head counts over the past year.