Consumer expenditures on nondurable goods continue to be strong in the Eleventh District, according to a survey of major retailers in the area. And, while purchases of durable goods are still relatively weak, they appear to be recovering somewhat. There also seems to have been a shift in consumer buying attitudes, with impulse buying giving way to cost-conscious "smart shopping". Many big-ticket purchases are currently being made simply to beat anticipated price increases in the future.

Sales of automobiles are beginning to return to a more normal mix of standard- and small-size cars, following the sharp jump in sales of economy models in the past few months. For example, one dealer says he is now selling four times as many large cars as compact models. This shift, along with recent deliveries of back orders of small cars, is restoring dealers inventories to a more normal mix than in recent months. However, inventory costs have increased, and dealers maintain they have not been able to pass these higher costs on to consumers. To ease the profit squeeze, one auto manufacturer is granting dealers a $200 across-the-board rebate on each car delivered from the factory.

Texas house-builders anticipate a strong turnaround in residential construction by midyear. Inventories of new houses completed but not sold are down, and more starts are planned. Sales are already beginning to exceed the levels recorded in late 1973, and some builders expect that the dollar volume will be up 33 to 60 percent by the year-end. However, builders predict home prices will increase as much as 10 to 15 percent, and land costs are described only as "going out of sight".

Strong sales are reported by the largest department store chains in the Southwest, with no evidence of a letup in the near term. However, some sales have been lost due to scattered shortages of selected items. Recently, catalog sales and purchases at rural outlets have risen sharply, as consumers reduce the number of shopping trips to metropolitan centers in order to save gasoline. Some Texas department stores specializing in more expensive product lines report sales slowed markedly in February, as consumers have become increasingly price conscious.

Higher dollar volumes but sharply slower unit sales of some items—especially meat—are reported by retail food stores. Consumers have significantly altered buying patterns as they attempt to stretch their food budgets, as evidenced by higher unit sales of macaroni and other flour products. Retailers also say that, while beef is a slow-moving item, meat extenders are selling very well. In anticipation of shortages and higher wholesale prices, some major grocery chains are stockpiling any available goods and report inventories at record levels.

The gasoline shortage has reduced or eliminated price differentials between major and minor brand stations, according to a spokesman for the Texas Service Station Operators Association. Consumers no longer are seeking out the minor brand stations as they did when these stations offered lower prices on gasoline. Therefore, the minor brand stations are in a better position with regard to their allocation of gasoline-relative to demands on them by customers-than are major brand stations. The response by some of the minor brand companies to the favorable allotment position has been to truck gasoline out of the state to higher priced markets.

Expenditures for travel continue to grow in Texas, although the composition of such spending is changing. One local travel agency is booking AMTRAK reservations for the first time, and much of the increase in air travel in Texas, particularly commuter flights, is in response to the higher cost of auto travel. Business at metropolitan motels and hotels continues to grow with increased business and convention traffic, while occupancy rates at motels located along interstate highways are off substantially.