Biz--DowJones: "More Businesses Raised Prices In 2nd Quarter And See More Increases Ahead"
dowjones.wsj.com
>>> July 14, 2000
WASHINGTON -- About one-third of the firms surveyed by the National Association of Business Economists reported an increase in their prices in the second quarter, the highest percentage in five years, and almost half said they expect to raise prices further this year.
Of the 127 economists surveyed by the NABE, 33% said their companies raised prices last quarter compared with 29% during the first quarter and just 20% for the fourth quarter of 1999. The NABE attributes higher prices primarily to rising wages and costs for materials. Just 5% of businesses reported falling input prices, compared with 60% that saw them increasing, the group said.
"Investment continues at a breakneck pace, aided in part by the push to adopt e-commerce technologies," said NABE President Diane Swonk, chief economist at Bank One Corp. However, Ms. Swonk said the productivity linked with those investments doesn't seem to be enough to keep pricing pressures in check.
"This mimics a pattern seen in the first quarter and suggests that something has clearly changed in the ability of firms to raise prices in the last six months," she said.
The NABE survey said underlying demand at respondents' firms remains "robust," in contrast to some signs of a slowdown in other economic indicators. The report said 52% of respondents saw demand rise in the second quarter, compared with 48% in the first, suggesting continued rapid growth in the U.S. economy.
Growth is expected to remain well in excess of 3% in the second half of the year, and hiring plans remain extremely bullish, the survey found, with about 40% of the firms intending to increase employment over the next six months, up significantly from the first quarter's 33%.
"This is despite widespread complaints that both skilled and unskilled labor remains in short supply," the NABE said.
(Compiled from Dow Jones Newswires and other sources)<<< |
