July 21, 1971
According to reports from businessmen and bankers, no important changes have occurred in the Fifth District economy during the last three weeks. In general, the gradual improvement in economic activity which began some months ago appears to be continuing. Bankers report continuing strong demand for all types of loans, and retail sales are reported as rising, although there appears to be some slackening in automobile sales. The District employment situation remains unchanged.
District manufacturers report that the volume of new orders continued the upward trend which began in January of this year. Shipments, backlogs of orders, and inventories were little changed from the previous reporting period. Furniture manufacturers again reported declines in the volume of new orders and backlogs of orders, and increases in inventories. Firms producing products related to housing and construction continue to report upward movement in shipments, volume of new orders, and backlogs of orders.
Survey results indicate that retail sales of goods and services improved further during the past three weeks, but the number of banking respondents reporting increases in automobile sales in their areas declined. The picture on changes in inventories since the last survey is mixed; however, a majority of respondents in manufacturing and trades and services believe that current inventory levels are too high relative to desired levels.
The District employment situation apparently remains about the same. In general, respondents indicated that there were no major changes in employment or hours worked per week since the last survey. A number of respondents, however, reported increases in wages paid. Upward wage pressure appears to be most prevalent in the trades and services area, with all but one respondent in this group reporting increases in wages paid.
No important changes in the pattern of prices received were reported by manufacturing or trades and services respondents.
Residential and nonresidential construction apparently continues to advance in the District. The majority of the banking respondents in the major cities of the District indicate a continuing surge of residential building. Bankers also report on balance that nonresidential construction activity is strong in their areas.
Banking respondents indicate that demand for business, consumer, and mortgage loans continues strong. There was a sharp increase in the number of respondents reporting an increase in business loan demand. While no banking respondent reported a decrease in mortgage loan demand, the number reporting mortgage loan demand up declined from the previous period.
District agricultural crop prospects on July 1 were generally good to excellent, although only fair prospects were reported in some parts of the District.
In general, respondents appear to remain cautious in their outlook for the District economy. Comments received from reporters indicate concern over the persistence of inflation and unemployment. The majority of banking respondents believe economic activity in their areas will increase in the near future, but there was a decline from the previous survey in the number reporting a probable increase.