And the strong dollar will continue to force operational changes by American companies. U.S. companies now face similar pressures. Very strong economic expansion continues through the early part of 1998, with few signs that lower oil prices have yet slowed the local economy. Although local oil companies are registering concern and caution, only scattered signs of slower energy activity have emerged. Local retailers report they easily cleared out their winter merchandise and, given the current strength in the retail market, are concerned they may have been too conservative in ordering for the spring season.
Sales continue to exceed annual plans, prompting retailers to expect a great first quarter.
The winter also saw a surge in auto sales. For December and January combined, Harris County auto sales were up 26 percent over the same period a year ago. Early reports, however, show February auto sales cooling somewhat from this strong pace. The warm winter and the Asian crisis have limited demand, while OPEC continues to overproduce. Respondents were unclear as to why gas prices have held up so well but cited flat natural gas production levels over the past 18 months as a possible explanation.