September 13, 1972
No important changes in current and prospective conditions in the Fifth District have occurred since the previous survey. Manufacturers report a slight decline in shipments and increases in new orders and backlogs. Increases are reported in employment and hours worked per week. Construction activity remains strong and the demand for all types of loans is up. In general, businessmen and bankers remain optimistic about the economic outlook for the District.
The diffusion of responses from District manufacturers indicates a slight decline in shipments, while new orders and backlogs are up substantially. Increases in both orders categories were reported by manufacturers in such important District industries as textiles, electronics, and steel. For the first time in several months, increases in manufacturing inventories were reported. Inventory levels relative to desired levels also increased, however, suggesting that some of the increase in inventories may have been unanticipated.
Retail sales continue strong in the District. Nearly three fourths of the banking respondents reported increases in general retail sales in their areas, and more than one half reported increases in automobile sales. Contact with several District retailers indicates that they continue to experience sales increases.
Increases in employment and hours worked per week were reported by District manufacturers. Trade and services respondents indicated an increase in employment but no change in hours worked per week. On balance, responses from manufacturers show an increase in wages paid and a decrease in prices received. More than one fifth of the manufacturing respondents reported declines in prices received. Several respondents mentioned a shortage of both skilled and unskilled labor in their localities.
Reports from District bankers, while showing increases in both residential and nonresidential construction, indicate that the pace of the advance in construction activity has slowed some, compared with the previous reporting period. Even so, approximately one third of the banking respondents report increases in construction in their areas.
In general, reports from bankers indicate that loan demand remains strong. More than one half of the banking respondents reported increases in the demand for business, consumer, and mortgage loans.
Crop prospects, as of August 1, were generally not as good as those in 1971. The outlook for reduced crop production reflects both smaller acreages for harvest and lower yields per acre. Total cash receipts from farm marketing during the first half of 1972 were 4 percent above a year ago, but the gain was only half the size of the national increase. To date, the 1972 flue-cured tobacco marketing season has been marked by strong demand, good quality tobacco, and unprecedented record-setting prices.
Businessmen and bankers in the District are optimistic about the economic outlook. Nearly 80 percent of the banking respondents believe that business activity in their area will increase in the immediate future.