Mid-Atlantic businesses expect higher prices in next 6 months


WASHINGTON -- Manufacturers and retailers in several mid-Atlantic states said business conditions rose in May, even as the service industry reported mixed results, according to a monthly survey by the Federal Reserve Bank of Richmond.

Survey respondents shared one expectation: They see prices rising modestly in the next six months.

Manufacturers said the cost of finished goods prices should rise an annual 0.4 percent during the next half year, while prices for raw materials advance 0.5 percent.

In the service sector, businesses said prices would rise 0.7 percent on an annual basis during that period; the retail sector expected a 1 percent jump.

The Richmond Fed survey of 296 manufacturers and 236 retailers and service companies firms -- based in the Carolinas, the District of Columbia, Maryland, Virginia and West Virginia -- also suggests that businesses in the region plan to hire more workers to meet increased demand.

Manufacturers said they expect shipments to rise, depleting inventories in coming months. And they said new orders, shipments and inventories of finished goods rose in May from April.

Retailers in the region said they expect demand for their products to advance in the next six months. They said their sales revenues, inventory levels and the average wage they paid their workers all increased in May.

The service industry reported lower revenues in May and an expected slump in demand over the next six months.

Pub Date: 6/12/96

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