Third district report
Business activity in the Third District has improved overall since the last Beige Book. Their was a strong increases in shipments and new orders in February.Third District banks reported little overall change in loan volume outstanding since the last Beige Book.Contacts in the commercial real estate sector said that leasing and construction activity have remained at low levels since the last Beige Book.The outlook among Third District business contacts is positive but not strong. Bankers expect only slight growth in lending over the next two quarters. Contacts in commercial real estate expect market conditions to improve slowly during the year.
Third District manufacturers reported strong increases in shipments and new orders from January to February.Producers within the furniture, petroleum, and ...view middle of the document...
Snowstorms deterred shopping and limited the advance in sales in January, retailers said, but most of those contacted for this report indicated that sales rebounded in February.The consensus among merchants in the region is that sales will continue to grow as the spring selling season gets underway. Auto dealers anticipate sales this year to exceed sales last year, although some remained concerned that further increases in gasoline prices could limit the improvement in sales.
At most of the Third District banks contacted for this report, total outstanding loan volume has been roughly level since the previous Beige Book.The outlook among Third District bankers interviewed in February is that total loan volume will expand only slightly over the next two quarters. Bankers said that consumers will remain reluctant to borrow until employment begins to improve more steadily and that business firms are still focused on strengthening balance sheets rather than taking on more debt.
Real Estate and Construction
While some builders noted a pickup in traffic in early February, the "slower-than-normal January means we won't know for awhile" whether overall trends are improving.The greater than usual prevalence of distressed property sales creates some additional competition for new homebuilders.They are positioned for a year of little or no growth.
Service-sector firms generally reported modest increases in activity since the previous Beige Book. Business-service firms generally have been posting slight gains as their customers see gradual improvement in their own activity. Most of the services sector firms contacted for this report expect slow growth in the months ahead.
Prices and Wages
Reports from manufacturers since the previous Beige Book indicated still more pervasive increases in input costs.Retailers generally indicated that selling prices have been steady or declining as they clear out winter merchandise.Business firms in the region reported mostly steady wages since the last Beige Book, although some said they have raised wages and salaries for certain skilled occupations