We recently surveyed a group of leading businessmen and bankers throughout the Sixth District about price shading and other topics. Six months ago, the identical group was questioned on similar topics. By comparison, attitudes toward economic prospects are slightly improved over six months earlier. Increases in manufacturing operations are now slightly more numerous, and there are fewer instances of cuts in capital expenditures. Rates on small CD's and savings accounts either have been lowered or probably will be shortly. On the other hand, price rises by suppliers continue to be numerous, price shading has not significantly increased, and business entrenchment remains widespread. Most of those questioned report that investment-residential construction excepted-will not be affected in the near future, if long-term rates come down further.

In our most recent questionnaire, several businessmen cited instances of price shading, but there was little increase in this practice. Specifically, selling below list prices was reported in transformers, copper cable, aluminum fabricated products, and plastics. A respondent in the metal fabricating business indicated that many producers and most distributors were selling below list prices. An oil business executive claimed that discounts of 8 to 10 percent were common.

As was the case with the earlier questionnaire, nearly all respondents cited price increases by suppliers. However, a feed producer said suppliers did not raise prices this January as they had a year ago. A steady and substantial increase in building material prices was noted.

According to those questioned, business entrenchment is still common. Failure to replace production workers and salaried employees leaving through attrition is evidently widespread.

Increases in manufacturing operations were reported in: paper products, meat packing, textiles (double knits, sport denim, corduroys, yarns), and apparel (low-priced suits). As a result of recent oil leases, there has been an increase in the demand for boats used by the offshore drilling industry. A businessman in the materials handling line reported a flood of inquiries in the past 30 days, which would indicate a substantial increase in the level of operations in that
business shortly.

In the questionnaire six months ago, attitudes toward economic prospects varied widely, with about an equal division between those expecting an upturn in the near future and those seeing recovery delayed until the winter and next spring. In the latest questionnaire, most respondents were somewhat more optimistic in their outlook.

The majority of the bankers answering the questionnaire indicated that rates on small CD's and savings accounts had either been reduced recently or would be in the near future.

Information received from other sources shows the following consensus about wage and price guidelines among 16 leading businessmen in the Tampa area: Guidelines are impractical; Wage increases are the main source of inflation; Neither The White House nor Congress can or will clamp down on labor unions; And a reduction in government spending would have
a favorable effect on reducing the inflationary spiral.