The latest survey of business conditions in the Third District shows that some key indicators remain on the increase. New orders and sales increased at many firms responding to this month's questionnaire. More firms reported inventory increases than decreases. Outlays for plant and equipment are scheduled to increase at over one-third of the firms contacted. And many firms expect to increase their inventories within six months. In general, most area businesses remain optimistic about the future. On the darker side, however, employment opportunities are flattening out a bit in the Third District. Expectations of increased inflation within six months were reported by approximately one-third of the firms contacted.

This Bank's business survey respondents reported their manufacturing activity continued to rise, but the number of increases dropped slightly this month. The vast majority of firms completing the survey's monthly questionnaire report either no change or an increase in their new orders, new shipments and the length of their delivery time. However, a small but growing number do report decreases in orders received, shipments and delivery times.

Employment opportunities in the area have leveled off somewhat. Over half of the firms responding to the business survey expect no change in the number of employees or the average number of hours worked during the next six months. Of those firms which are changing their employment schedules, increases predominate on the six month planning horizon. On the one month planning horizon, as many firms reported increases as reported decreases.

About half of the responding firms report no plans to change the size of their inventories for at least six months. However, of those firms which do anticipate inventory adjustments, twice as many foresee increases as decreases.

Plant and equipment spending plans remain at the slightly higher level reached last month. The majority of firms are evenly divided between those undertaking investment increases and those anticipating no change in their present capital expenditure rate. Very few firms are cutting their investments in plant and equipment.

Most businessmen responding to this Bank's survey expect to pay and receive the same prices next month as they do now. However, a large minority do foresee rising prices on the six month horizon. This is essentially the same price outlook reported last month.

Area banks report little or no growth in their demand and time deposits. Business loan demand is good from small firms but large national businesses are hardly borrowing at all. This holds back growth in the overall business loan category. Consumer and mortgage loans are expanding in the Third District again this month.