May 17, 1972
The general tone of conditions in the Third District continues to be one of steady improvement. Area manufacturers report further increases in new orders and shipments for both April and May and, as a result, have added employees and lengthened the average workweek. And these firms see continued expansion during the months ahead. Prices show signs of stability at these firms, both for prices paid and prices received. Loan demand is growing steadily at area banks with more of the same predicted for the next month.
District manufacturers polled in the Bank's Monthly Business Outlook Survey report continuing strength in the regional economy. Over 45 percent saw overall business conditions improving during the last two months. This increased activity meant improved conditions for many firms. Approximately 30 percent of the firms reported increases in new orders and shipments for April, while over 35 percent report increases in the same categories so far in May. This pickup is having a favorable impact on the regional employment picture. Nearly 8 percent of the firms added employees in April, while over 16 percent report they are doing so in May. In addition, some firms are lengthening their average employee workweek. And the outlook appears favorable during the next few months. Over 40 percent of the firms see improved overall conditions in June, with over 35 percent predicting a pickup in new orders and shipments. On the six-month horizon, nearly 70 percent see increases in new orders and shipments. Almost 30 percent plan to add employees over that time span, with 17 percent stretching out the average workweek. Nearly 50 percent report they will be increasing capital expenditures during the next six months.
Despite this increase in business activity, the price picture appears to be remaining fairly stable. In April, nearly 65 percent of the firms reported no change in prices paid, while nearly 80 percent reported no change for prices received. Comparable figures for May are at the 70 and 90 percent levels respectively.
Loan demand at area banks is growing slowly but steadily over a wide variety of sectors. Commercial and industrial loans show moderate improvement.
There appears to be particular strength in construction, mortgage, and foreign loans. The outlook over the next month appears optimistic, especially in construction, real estate, and consumer categories.