June 14, 1972
Results of our latest survey of businessmen and bankers indicate a continuing uptrend in business activity in the Fifth District. In general, shipments, new orders and backlogs of orders are increasing in the manufacturing sector. Retail sales—especially automobile sales—continue to reflect the strength evident in our last several surveys. Employment and hours worked per week are reported unchanged in the trade and services sector and increasing in the manufacturing sector. Banking respondents also report increases in employment in most areas of the district. Residential and nonresidential construction activity continues strong. Banking respondents indicate the demand for all types of loans is increasing. Businessmen and bankers continue to be optimistic concerning the general economic outlook.
Manufacturing respondents report further increases in shipments, new orders and backlogs, with gains especially notable in such important district industries as paper, chemicals and primary and fabricated metals. On balance, manufacturers report a decline in inventories and the diffusion of responses indicates inventories in some important lines have fallen below desired levels. Coupled with increased demand for business loans reported by bankers in the survey, this suggests some step-up in the rate of inventory buying by district manufacturers may be under way. Current capacity levels are rated as about right by most manufacturing respondents.
Both banking and retail respondents report further increases in sales. Automobile sales were reported to be especially strong, with more than 50 percent of the banking respondents indicating increases in their areas. Trade and service respondents also indicate inventories are down.
Employment and hours worked are reported to be up in manufacturing but little changed in trade and service. Both manufacturers and trade respondents report increases in wages, with some retail firms expressing concern over the impending minimum wage increase. On balance, trade and service respondents reported no change in prices received while manufacturers reported a slight decline.
According to reports received from district bankers, residential and nonresidential construction activity continues strong in the district. More than half of the banking respondents report an increase in residential construction. Bankers report strong demand for all types of loans. Demand for consumer loans appears to be especially strong, with 17 of 21 banker respondents indicating further increases in their consumer loans outstanding.
This district's January-April cash receipts from farm marketings were 3 percent above a year earlier, but the increase was significantly less than the 16 percent gain nationally. Larger livestock receipts accounted for all of the district increase.
In general, bankers and other businessmen in the district remain optimistic about the general economic outlook. Forty percent of the banking respondents believe business activity in their respective areas will improve in the next three months and the remainder believe activity will stabilize at present levels.