Most manufacturers contacted are granting overall pay increases of 4 to 5 percent. Higher increases are reported for technically oriented personnel, while lower increases are the norm in situations where cost reduction is a top priority. Only one-quarter of the contacts plan increases in capital spending this year. Most companies intend to reduce capital costs or to manage them more closely. Although some firms will build up inventories later this year, many indicate that cost concerns will temper their hedging against potential Y2K-related disruptions.
Most manufacturers expect their business to expand in coming months.
However, they frequently mention risks or limits to growth, attributable in some cases to general economic factors and in other cases to industry-specific forces. The residential real estate market in New England is very active. Contacts report strong demand, with the number of sales rising in many places. Several contacts cite supply shortages, and the number of listings is much lower than a year ago. Activity in the Greater Boston area and southern New Hampshire is very strong.