August 9, 1972
The recent uptrend in economic activity in the Fifth Federal Reserve District continues. Manufacturers report a slight decline in backlogs of orders and no change in shipments and in volume of new orders. Retail sales continue strong. Employment and hours worked per week have changed little since the last survey. Activity in the construction sector remains strong, and bankers generally report increases in loan demand. Bankers and businessmen in the District continue to be optimistic about the outlook for District business activity.
Reports from manufacturers in the District indicate a further slight decline in backlogs of orders and no change in shipments or in the volume of new orders. Inventories remain virtually unchanged, but there was an increase in the number of manufacturers who regard inventory levels as too high in relation to sales prospects. In general, current plant and equipment capacity is reported to be adequate.
General retail sales continue the upward trend evident in recent months. On balance, banking respondents report increases in both general retail sales and automobile sales, although the proportion reporting increases is not as great as in the previous survey. Automobile sales continue stronger than general retail sales. Approximately 50 percent of the banking respondents indicated that automobile sales in their area were up.
Slight declines in employment and hours worked per week were reported by manufacturing, trade, and service respondents. The fire in a West Virginia coal mine which resulted in several deaths led to a strike idling some 3,000 workers in West Virginia. Increases in wages paid were reported by about 35 percent of survey respondents, but most respondents reported no change in prices received. About two-thirds of the manufacturers reported inadequate supplies of skilled labor, and about a third reported that supplies of unskilled labor were less than adequate.
Activity in residential and nonresidential construction remains very strong in the District. More than 50 percent of the bankers reported increases in construction activity in their areas. Nonresidential construction seems to have strengthened sharply in recent weeks.
All banking respondents reported that demand for all types of loans had either remained at recent high levels or increased. More than half reported increases in the demand for business and mortgage loans and about two-thirds reported increases in the demand for consumer loans.
The District's January-May cash receipts from farm marketings were 5 percent above a year ago, with gains in crop and livestock receipts about equal. Strong demand and the best quality tobacco in years have resulted in history-making prices in Border Belt flue-cured tobacco markets during the first two weeks of the 1972 season.
The level of optimism concerning business activity in the District remains high. Most banking respondents believe that business activity in their area will increase in the immediate future.