The outlook is still optimistic in the Third District; approximately 65 percent of the respondents to this Bank's monthly business outlook survey report expectations of increased business activity during the next six months. However, some area businessmen do expect a temporary lull in production between now and Christmas. Current employment opportunities are unchanged, but the longer-run outlook is better. Over 40 percent of the responding firms are planning to increase their investments in inventory and plant and equipment during the next six months. Home construction continues at a high level. Most banks' deposits are flat while their consumer, small business, and mortgage loans continue to expand. On the darker side, inflationary expectations are on the rise.

Some lull in production for December is showing up in the responses from businessmen polled in the Third District. Three times as many firms report increases as decreases in their new orders and shipments for November. But, for December, the decreases in planned production slightly exceed the increases. The longer-run outlook still remains bright, however, as over half the area businessmen report plans for increased production during the six months ahead.

Over 85 percent of the respondents to the Third District's business outlook survey report no change in the number of persons they employed or the length of their average employee's workweek during November.

During the next six months, over half the firms still report no change in their employment plans, but, one-third of them do report plans to increase the number of persons in their work force. The unemployment rate in the Third District has just fallen to 4.5 percent from 5.7 percent three months ago.

Only a few more firms report increased inventories for November than report decreases, with the majority having no change. Looking six months into the future, however, 40 percent of the firms report plans to increase their inventory investment. Similarly, over 40 percent report plans to increase investment in plants and equipment during the next six months.

Home construction activity in the Third District is continuing strong at the high levels of past months with very large increases occurring in the Atlantic City area. Nonresidential construction is flat. Public works construction in the Third District is off substantially. However, total construction is still rising.

Area bankers report that demand deposits are flat. Time deposits are increasing slowly at some banks. Small business, consumer, and mortgage loans continue to be in strong demand, but few large national corporations are increasing their borrowings at this time.

Not one respondent to this month's outlook survey reports experiencing any decrease in the prices he pays or the prices he receives. On the six-month horizon, over half the firms expect to pay higher prices and over one-third expect to receive higher prices.