1973 Energy shortages are beginning to cause considerable concern, but as yet the pace of economic activity continues to be strong. Retailers in most Districts anticipate good Christmas sales, and agricultural earnings continue to climb. Capital expenditures are another source of strength, and although considerable variation is reported for business investment plans for 1974, the prospects are that capital spending will remain high.
Weaknesses are most apparent in residential housing and automobile sales.
The impact of petroleum shortages varies considerably from region to region, and from industry to industry. Sales of compact cars are excellent, and so, interestingly enough, are sales of luxury cars. Diesel fuel, in particular, appears to be in short supply and black markets for this fuel are reported to be developing in some areas. Other industries affected include petrochemical-based plastics, manufacturers of recreational vehicles, and plywood mills. Airlines are laying off employees in several Districts, and tourism- related manufacturers are being hurt according to reports from Minneapolis, Kansas City and San Francisco.