Car dealers report that sales in April and May are down about 6 percent on average from a year earlier. In some instances, declines of up to 20 percent have been reported. Many contacts cite rising interest rates and gasoline prices as causes of the slowdown. Most dealers, however, remain optimistic that sales this summer will pick up. Manufacturing and Other Business Activity Contacts report stable business activity in the District, although tight labor markets are still a major problem for nearly all industries.
Some firms continue to note that labor shortages are restricting their output capabilities.
Many other firms are coping by recruiting overseas workers to fill positions. Hotels and retail stores report offering career counseling, job training and child care to attract employees. High fuel prices are taking a toll on District transportation and trucking firms, which continue to surcharge customers 3 to 6 percent to maintain profits. Most trucking companies posted first-quarter losses, but hope to break even in the second quarter. Labor shortages and fuel prices notwithstanding, contacts report steady business activity.