Labor shortages appear to be leading retailers to boost wages in order to retain critical help. Overall wage growth is said to be running at a 4 to 5 percent rate, in the upper half of the 3 to 5 percent range reported previously. The tourism sector reports that the available labor pool has been exhausted, constraining the operations of new start-up restaurants, in particular. Merchants generally say that they are not raising selling prices and that vendor price increases are only sporadic. Two exceptions are that lumber prices continue to decline and hotel rates are rising in response to continued excess demand for rooms.
Most retail contacts plan some modest expansion of their operations during the next six months.
Looking forward, they are generally optimistic about the overall economic outlook as well as their own sales growth prospects through the first quarter of 2001. However, they express considerable uncertainty concerning prospects beyond the first quarter. Most First District manufacturing contacts indicate that recent sales or orders are up relative to a year earlier. A contact making parts for communications devices reports that a large customer recently cancelled an order. A couple of manufacturers of consumer instruments express disappointment that sales are no higher than year-earlier levels.