April 12, 1972
A continuing improvement in business activity is indicated by results of our most recent survey. On balance, manufacturers report continued increases in shipments, new orders, employment, and hours worked per week, and very little change in backlogs of orders. Strength in retail sales is reported by both bankers and trade and service respondents. Little change in prices received was reported, while increases in wages paid were reported by a sizeable number of respondents. More than 50 per cent of banking respondents reported that the demand for consumer, mortgage, and business loans was up. Businessmen in the District continue to be optimistic in their outlook for the economy in the next several months.
District manufacturers report continued increases in shipments and volume of new orders, but very little change in backlogs of orders. Declines in backlogs of orders were reported, however, by several manufacturers of construction related materials. Increases in shipments were reported by textile, hosiery, and furniture manufacturers. Manufacturers report further increases in employment and hours worked per week, while trade and service responses indicate no change in employment but a sharp increase in hours worked per week. The diffusion of responses from bankers indicates that both employment and hours worked per week have increased in their areas.
Retail sales apparently continue to be strong. More than 75 per cent of the banking respondents reported increases in general and automotive retail sales, and all trade and service respondents indicated that sales either remained the same or increased. Few changes in prices received were reported by either trade and service or manufacturing respondents. One-fourth of the manufacturing respondents and one-third of the trade and service respondents reported increases in wages paid.
All trade respondents reported no change in inventories, while slightly more than one-fourth of manufacturers reported a decline in inventories. Inventory declines appeared to be most prevalent among textile and synthetic fiber manufacturers. The overwhelming majority of both manufacturing and trade and service respondents indicate that inventories relative to desired levels are about right. Lower than desired inventory levels were reported by nonferrous metal producers. Most manufacturers report that current plant and equipment capacity is about right.
According to banking respondents, sharp increases in both residential and nonresidential construction have occurred since the last reporting period. Demand for all types of loans is reported to be strong, especially consumer and mortgage loans. All but one banking respondent reported an increase in the demand for consumer loans, and more than 60 per cent reported an increase in the demand for mortgage loans. The demand for business loans, which has been slow for the last several reporting periods, was reported up by 50 per cent of the banking respondents.
District farmers' cash receipts from farm marketings in January were up 3 per cent over a year ago, considerably less than the national gain of 12 per cent.
Businessmen in the District, especially bankers, believe that the moderate uptrend in the economy, evident in the last several months, will continue. More than 80 per cent of the banking respondents reported that they expect an increase in business activity in the months ahead.