The heavy truck industry is operating near capacity, with a backlog that extends through the end of the year. A UAW work stoppage at a major Michigan auto facility did not affect any of the Fourth District's major auto plants. No significant price increases or materials shortages were observed, but several firms indicated difficulty hiring engineers, and employment agencies reported trouble finding workers for light industrial jobs and filling skilled positions such as welders. Area retailers expect that, for the year as a whole, receipts will be modestly improved from 1996. Some seasonal softness is noted for children's apparel, which is anticipated to pick up as the school year approaches.
Retailers report strength in shoe sales.
District contacts are satisfied with inventory levels and say that price increases by suppliers have been light. Auto dealers report that sales have slowed from the exceptional pace of the previous two years, and imports have recently begun to outperform domestic brands. Dealers, who indicate that competition has reduced prices and increased promotional costs on a wide variety of models, see profit margins narrowing. Used car sales remain weak, however, and a few dealers indicated deep price discounts on used vehicles. Agriculture District agricultural conditions vary substantially by region and commodity.