Due to a sharp increase in U.S. drilling activity in the last year, the demand for and price of these commodities have been high. As a result, shipments and selling prices of OCTG products are moving up significantly and the earnings outlook for NS Group is greatly improved. Due to higher energy drilling activity and increased demand for and sales of OCTG products, NS Group expects to be profitable in the fiscal quarter ending September, 2000. We do not anticipate a recession. The broad indicators show inflation is under control, but we remain cautious with a strong economy and a low unemployment rate.
Unemployment is at historically low levels.
Retention is an issue, especially when good job alternatives become increasingly available. Employees understand the cyclical nature of our business and some choose alternative employment, sometimes at lower pay in exchange for stability. Higher employee turnover increases training costs. A lack of skilled labor and high turnover makes it difficult to lower production costs. The state should provide the same opportunities to existing businesses as it offers new businesses entering the state.