Third District businessmen report that the regional economy is continuing its upward course. The latest business outlook survey of large manufacturers in the area shows that over half of those surveyed are chalking up advances in new orders and shipments. Retail sales are holding up well again this month. Banks are experiencing good load demand. Inventories are rising, and plant and equipment spending is on the increase. However, employment is almost flat, and expectations of rising prices continue. Industrial activity continues upward with just over half the firms contacted reporting increases in new orders and shipments. This expansion is expected to last at least the next six months for a majority of the firms canvassed. Employment in the Third District is practically level. Over three-fourths of the firms responding to our survey of large manufacturers report no change in the number of the employees or the length of the average workweek.

Of the remaining firms, about twice as many are experiencing increases and decreases in the number of employees. The six-month labor outlook is only modestly more optimistic. Retail sales continue strong again in September. Area retailers report sportswear and home furnishings were experiencing stronger than average gains. Auto dealers report another good month as well. Major banks in the Third District report continued strong loan demand from most of their departments. Mortgage and consumer credit plus loans to small businesses set the pace. Most major corporate borrowers, however, are not utilizing their lines of credit very heavily. Business inventory investment is contributing a little strength to the economic advance in the Third District. Almost half the firms report no change in their inventories. But, among those reporting inventory changes, almost twice as many report gains as decreases.

Plant and equipment spending is turning up among those firms reporting changes in their capital expenditure programs. There were six times as many reporting increases as decreases, an improvement over last month. Over three-fourths of the firms responding to the Business Outlook Survey report no change in the prices they pay and the prices they receive this month. But, during the next six months the picture does not appear as favorable. Eight times as many manufacturers expect to receive higher prices as expect to receive lower prices for their products. And, over two-thirds of the respondents expect to be paying higher prices six months from now, while almost none expect their input costs to drop.