The Federal Reserve Beige Book is out.
Regional Federal Reserve banks said employment conditions were little changed since the last report in August.
Consumer spending was "flat to up slightly," while vehicle sales were at "favorable levels."
The banks also said that the housing market improved last month, while manufacturing was "somewhat improved."
Overall loan demand increased slightly, according to the Beige Book, and credit standards were "little changed."
Price pressures were "contained," according to the regional banks, and "wage pressures remained modest" since the last report in August.
Here is the full text:
Prepared at the Federal Reserve Bank of New York and based on information collected on or before September 28, 2012. This document summarizes comments received from businesses and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.
Reports from the twelve Federal Reserve Districts indicated that economic activity generally expanded modestly since the last report. The New York District noted a leveling off in economic activity, and Kansas City indicated some slowing in the pace of growth. In general, other Districts reported that growth continued at a modest pace.
Consumer spending was generally reported to be flat to up slightly since the last report. A number of Districts characterized retail sales as expanding at a modest pace, while reports from New York, Chicago, and Kansas City indicated flat or softening sales. Vehicle sales were also generally characterized as stable but up from a year earlier and generally at favorable levels. Used car sales were mixed. Most Districts described tourism as fairly robust, though Kansas City noted some general softening, while New York and Dallas indicated some scattered signs of weakening.
Residential real estate conditions improved since the last report. Most Districts reported strengthening in existing home sales, while prices were described as steady to increasing, with declining inventories noted in the Boston, Atlanta, Minneapolis, Dallas, and San Francisco Districts. Residential construction was also described as rising in most Districts. Commercial real estate markets were mixed since the last report. Office markets showed signs of softening in the northeastern Districts--Boston, New York, and Philadelphia--while most other Districts reported stable or mixed market conditions. Industrial markets showed some strength in the New York, Philadelphia, Cleveland, and Atlanta Districts, while softer conditions were noted in Richmond.
Conditions in the manufacturing sector were mixed but, on balance, somewhat improved since the last report. The Boston, Richmond, Atlanta, St. Louis, Kansas City, and San Francisco Districts reported some expansion in activity, whereas New York, Chicago, and Minneapolis reported some weakening in activity. The nonfinancial services sector showed modest improvement in the latest reporting period. Richmond, Minneapolis, Dallas, and San Francisco reported some expansion in activity, while New York and Philadelphia indicated steady or mixed conditions.
Overall loan demand was steady to stronger in most Districts. Credit standards were little changed since the last report, and a number of Districts noted improvements in loan quality or steady to declining delinquency rates. Agricultural conditions were mixed, with drought conditions continuing to adversely affect much of the mid-section of the nation. Activity in the energy sector remained robust.
Districts mostly reported little change in prices of both finished goods and inputs. Prices for agricultural commodities and petroleum-based products were generally reported to be higher, while natural gas prices were said to be low or declining. Employment conditions were little changed since the last report. Several Districts continued to report shortages of highly skilled workers, but otherwise wage pressures remained modest. Philadelphia, Cleveland, and Chicago noted increases in the costs of employee medical benefits.
Consumer Spending and Tourism
Consumer spending was mixed but generally reported to be flat to up slightly over the latest reporting period. Retail sales were said to have improved modestly in the Cleveland, Richmond, Atlanta, Minneapolis, and San Francisco Districts, while sales were characterized as flat to softer in the New York and Kansas City Districts. In general, retail sales were reported to be running only modestly ahead of a year ago. A number of reports noted various factors affecting sales, such as rising gasoline prices, political uncertainty, concerns about the "fiscal cliff" and weather. Atlanta and San Francisco noted that discounters have been outperforming traditional department stores. Cleveland reported that back-to-school merchandise sold well, while Chicago said that such sales were below expectations. Boston noted a pickup in furniture sales, Richmond cited brisk sales at building supplies stores, and San Francisco reported stronger demand at restaurants and food-service establishments.
Vehicle sales were mixed but generally at favorable levels. Sales of new vehicles were steady to stronger and running ahead of comparable 2011 levels. Philadelphia, Atlanta, Minneapolis, and San Francisco described sales as strong, while New York and Chicago reported some moderation in sales in September, after a fairly strong August. Kansas City and Dallas reported some softening or leveling off in sales. The Cleveland and Kansas City Districts noted that crossover SUVs have been selling well relative to less fuel-efficient vehicles. Sales of used vehicles were mixed, with San Francisco describing them as robust but New York and Cleveland characterizing them as flat.
Tourism was generally described as steady at robust levels, though there have been scattered indications of some softening. Boston, New York, Philadelphia, Richmond, Atlanta, Minneapolis and San Francisco described tourism as strong, whereas the Kansas City and Dallas Districts indicated some signs of weakening. Even Districts reporting strength noted some pockets of softening: Boston reported a small drop in advance bookings, New York indicated a dip in activity in mid-September, Richmond noted a significant drop in government-sponsored bookings, and Atlanta mentioned disappointing cruise bookings and on-board spending. The Dallas District noted weakening travel demand from Europe and Asia; Atlanta also indicated weakening traffic from Europe but added that Canadian and Latin American visitors largely picked up the slack.
Real Estate and Construction
Residential real estate showed widespread improvement since the last report. All twelve Districts reported that existing home sales strengthened, in some cases substantially. Selling prices were steady or rising. Boston, Atlanta, Minneapolis, Dallas and San Francisco noted declining or tight inventories, which have put upward pressure on prices. Modest price increases were reported in the New York, Richmond, Chicago, and Kansas City Districts. New York and Richmond reported relatively strong demand at the high and low ends of the market, whereas Philadelphia and Kansas City noted relative strength for mid-range homes; Boston indicated a shift in the mix toward lower or medium priced homes. New home construction and sales were more mixed but still mostly improved: increased construction and/or new home sales were reported in the Atlanta, Chicago, St. Louis, Kansas City, Dallas and San Francisco Districts. Multi-family construction, in particular, was described as robust in the Boston, New York, Atlanta, Chicago, and Dallas Districts. Residential rental markets continued to be characterized as strong, even in the New York and Atlanta Districts where rents increased somewhat less strongly than in recent months.
Commercial real estate markets were mixed since the last report. Office markets showed signs of softening in the northeastern Districts--Boston, New York and Philadelphia--with New York remarking on substantial new supply coming on the market in early 2013. In contrast, Atlanta, Minneapolis and San Francisco noted some improvement, while most other Districts reported stable or mixed market conditions. Industrial markets showed some strength in the New York, Philadelphia, Cleveland and Atlanta Districts, while conditions were described as sluggish in Richmond and mixed in St. Louis. Atlanta noted weakness in the market for retail space. Commercial construction activity was also mixed: Atlanta, Minneapolis and Kansas City reported some improvement in non-residential construction activity, while Richmond and Dallas noted that activity was sluggish.
Manufacturing
Conditions in the manufacturing sector were mixed since the last report, though on balance, more Districts reported that conditions had improved than worsened. The Boston, Richmond, Atlanta, St. Louis, Kansas City, and San Francisco Districts reported that activity expanded, though growth was generally seen as modest. Activity was reported as mixed in the Dallas District, while the New York, Chicago, and Minneapolis Districts reported that activity weakened, though declines were mild for the latter two. Significant gains in manufacturing related to the construction, energy, and transportation sectors were reported across several Districts, with particularly robust gains tied to the automotive industry. There were exceptions in the Kansas City and Dallas Districts where manufacturing related to transportation equipment was reported as mixed.
Steel production was said to be flat in the Cleveland and San Francisco Districts, and lower in the St. Louis District. Activity related to machinery and equipment was reported as lower in the Philadelphia, Chicago, and Kansas City Districts. Weaker sales growth in the high tech industry was reported by Dallas, and Kansas City said that growth among high-tech firms remained sluggish in its District. The Boston District noted some weakness in the semiconductor industry, while the San Francisco District said that new orders from the semiconductor industry had improved. Manufacturing contacts in the St. Louis District were tentative about the outlook for 2013, and contacts in the Dallas District noted some uncertainty about the outlook due to the upcoming election.
Nonfinancial Services
Activity in nonfinancial services was stable to slightly stronger since the last report. The Richmond, Minneapolis, Dallas, and San Francisco Districts reported that service-sector activity expanded, while such activity was reported as steady in the New York District and mixed in the Philadelphia District. Richmond noted that business activity strengthened for professional, scientific, and technical service firms, and Dallas noted strength in energy, accounting, and audit-related services. There was an increase in activity for a wide range of consulting services in the Boston and Minneapolis Districts. Activity related to health care was reported to be stable in the San Francisco District, but increased significantly in the Boston District. San Francisco reported continued sales growth for a wide variety of technology services, and noted that demand picked up for restaurants and other food-service providers.
Reports on goods transportation services generally remained positive. A pick up in such activity was noted in Cleveland, Atlanta, Richmond, and Dallas, while such activity was said to be flat in Kansas City. Contacts in the Cleveland, Atlanta, and Dallas Districts reported strong shipments of automotive, construction, and energy-related products. Port activity expanded to record levels in the Atlanta and Richmond Districts. Air cargo volume increased in the Atlanta District, but declined in the Dallas District due to weakness in the international sector.
Banking and Finance
Overall loan demand increased slightly on net since the last Beige Book report. New York, Philadelphia, Cleveland, Richmond, Atlanta, St. Louis, and San Francisco reported stronger loan demand on balance, while Kansas City and Dallas reported flat demand and Chicago reported somewhat weaker demand. Most Districts reported an increase in mortgage lending, especially for refinancing purposes. New York, Cleveland, St. Louis, Kansas City, and San Francisco reported some increase in demand for commercial and industrial loans, while demand for business loans was weak in Chicago and Dallas, and was characterized as mixed in Richmond. Demand for consumer credit, particularly for auto loans, was said to be strong in the Cleveland, Atlanta, St. Louis, Dallas, and San Francisco Districts, while consumer loan demand was more limited in New York, Richmond, Chicago, and Kansas City.
Credit standards were little changed since the last report. However, New York noted some tightening for consumer loans and residential mortgages, while Richmond and Chicago reported some easing for commercial and industrial loans. Still, loans remained difficult to obtain for many small businesses in the Cleveland, Richmond, and Chicago Districts. Banking contacts in the Philadelphia, Cleveland, Dallas, and San Francisco Districts reported stiff competition among lenders. Philadelphia, Kansas City, and Dallas noted general improvements in loan quality, and delinquency rates generally held steady or declined in the New York, Cleveland, and Dallas Districts.
Agriculture and Natural Resources
Agriculture conditions were mixed since the last report. Drought conditions continued to hurt the agriculture sector in the Chicago District, parts of the Minneapolis District, and the Kansas City and Dallas Districts. However, agriculture activity was reported as higher in the Atlanta and St. Louis Districts, as well as in parts of the Minneapolis District, and was reported as stable in the San Francisco District. The Chicago and Dallas Districts noted that increased rainfall had improved crop conditions. In the Dallas District, crops were reported to be mostly in fair to good shape, with production levels ahead of last year but below average due to ongoing dry conditions. Producers in the St. Louis District reported that crops were generally in better condition than at the time of the previous report, and harvest rates for corn and rice were well ahead of their five-year averages. Contacts in the Atlanta District reported that the rise in some crop prices related to the drought in the Midwest led to an increase in crop production in the Southeast. Higher feed prices continued to adversely affect livestock producers in the Atlanta, Chicago, Minneapolis, Dallas and San Francisco Districts, though the Chicago District noted some easing in higher feed prices which provided a bit of relief.
Activity in the energy sector remained strong, with the Minneapolis, Kansas City, and Dallas Districts reporting robust gains in activity. The Minneapolis District reported that oil production hit a new record high in North Dakota, and the Cleveland District reported that oil and natural gas production held steady. Natural gas exploration was reported as lower in the Kansas City District and in parts of the Minneapolis District. Coal producers in the Cleveland District reported declines in production.
Employment, Wages, and Prices
Employment conditions were little changed since the last report. The Boston, Cleveland, Atlanta, Minneapolis, and Dallas Districts indicated that employment levels were flat or up slightly, with stagnant demand and uncertainty related to the upcoming presidential election, U.S. fiscal policy, and European debt issues cited by some as restraining hiring. The New York and Chicago Districts noted weaker labor market conditions, and conditions were described as mixed in Richmond. Firms in the St. Louis District reported an increase in hiring plans. Several Districts continued to report that employers were having difficulty filling highly skilled positions. In response, a few Districts noted that firms were starting to increase training programs to meet their staffing needs.
Most Districts reported that wage pressures remained modest since the last report, though an increase in the cost of employee medical benefits was noted in Philadelphia, Cleveland, and Chicago. To the extent that wage increases were observed, they were concentrated among highly skilled workers in information technology, health care, professional services, and some of the skilled trades, according to reports from the Chicago, Minneapolis, Kansas City, and San Francisco Districts.
Price pressures were said to be contained as most Districts reported that both finished goods and input prices were little changed since the last report. Higher prices were cited by some Districts for agricultural commodities and petroleum-based products, although low or declining natural gas prices were reported in the Atlanta, Kansas City, Dallas, and San Francisco Districts. Contacts in the Atlanta, Chicago, Kansas City, and Dallas Districts noted that drought conditions continued to result in higher feed prices. There were scattered reports of higher crop prices starting to show through to food prices at the consumer level. Atlanta reported an increase in corn and soybean prices, while Chicago and Kansas City reported that these prices declined somewhat. Slightly lower prices for some technology-related products were reported in the San Francisco District.
Return to top
First District--Boston
Reports from business contacts in the First District indicate the region's economy is expanding at a modest pace. Most retail and manufacturing contacts report sales or revenue gains from a year earlier, although the manufacturers say growth is slower than earlier in the year and some have seen actual declines. Consulting and advertising firms are generally upbeat, with results depending on specific client industries. Residential real estate contacts note increases in sales and only small changes in median sale prices. Commercial real estate leasing activity has slowed somewhat, while investment conditions remain positive. With the exception of a consulting firm that has expanded recently and a manufacturer citing especially strong growth, responding firms are doing only modest hiring. While contacts in most industries mention the upcoming election, so-called fiscal cliff, and Europe as risk factors increasing uncertainty, it is only in commercial real estate leasing that respondents say current activity levels are measurably damped by such concerns.
Retail and Tourism
First District retailers contacted for this round indicate that sales through mid to late September are slightly above 2011. Year-over-year sales increases in recent months range from low single-digit to high single-digit percentage gains, although one retailer reports that its 2012 sales to date are 2 percent to 3 percent below last year's. Furniture sales have picked up after declining during the summer, while spending on apparel and household items remains strong. Contacts express some concern that consumer sentiment could be negatively affected by domestic politics and the fiscal cliff, which increases their uncertainty about how well the end-of-year 2012 holiday sales season will turn out. While such concerns lead retailers to expect the U.S. economy will remain flat over the next 6 to 8 months, respondents are nonetheless cautiously optimistic that their 2012 revenues will end up slightly ahead of 2011 levels.
The Boston tourism industry continues to benefit from a rebound in domestic and international business travel, although the leisure sector has seen a small drop in advance bookings compared to six months ago. The tourism industry has slightly downgraded its overall forecast for 2012, but this year's performance looks to be the industry's best since 1999-2000. Expectations are that Boston tourism will be strong again in 2013, with revenues rising slightly from 2012.
Manufacturing and Related Services
Discussions with manufacturing contacts in the First District paint a picture of an economy that is growing slowly but, on net, still growing. About half the respondents report a substantial slowdown in growth or outright fall in sales in the most recent period compared with a year earlier. Three contacts supplying equipment to factories note weakness in the semiconductor industry, which they say reflects its idiosyncratic cycle and not the macro economy. A contact in the toy business reports that orders for Christmas are coming later and later in the year, partly because lead times have shrunk and firms can order in September for November delivery.
Not all responding firms report softening. For example, a contact at a pharmaceutical firm says the company's growth is strong. The firm plans to hire 1,000 people over the next year, which represents a 20 percent increase in headcount; the hires will be mostly in sales and marketing.
For the most part, firms reporting weakness indicate it has yet to affect either hiring or investment substantially. Only about one-quarter of respondents say they are actually cutting staff; for one firm, the layoffs are in Europe and another firm attributes them at least partly to increased productivity. Several contacts report that their firms are re-evaluating their benefits structures as a way to conserve cash. No contact reports making any adjustments or even projecting any adjustments to their capital spending plans. Indeed, one contact at a semiconductor equipment maker says they are maintaining their long-term investment plans despite quarter-on-quarter sales declines on the order of 20 percent in the third quarter which are expected to continue in the fourth.
In general, firms remain somewhat tentative about 2013, although this is partly because they are currently engaged in their annual "planning cycles" for 2013. One contact in the industrial distribution business says he expects they will plan for 1 percent to 2 percent growth in 2013, in line with Q3 this year; by contrast, their 2011 plan for 2012 assumed 5 percent to 6 percent sales growth. One contact in the publishing business says that they will "continue to thrive on low single-digit organic growth." Many contacts say that slow growth is the "new normal."
Selected Business Services
Consulting and advertising contacts in the First District report a generally positive, although not exuberant, third quarter. Only one contact cites flat revenues, while the others note varying levels of growth largely determined by the prospects of their respective client bases. Marketing and advertising contacts report weaker conditions than consulting firms. They note a large degree of uncertainty in the market as well as a shift in demand towards services focused on social media and e-commerce. Demand for health care consulting services has skyrocketed due to "unprecedented" levels of merger and acquisition activity among health care providers and the need for improved efficiency as a result of the ACA. At the same time, firms focused on the pharmaceutical industry have experienced slow growth because their clients have been hurt by blockbuster drugs losing patent protection and cost pressures from governments. Economic consulting remains strong, reflecting high levels of complex high-stakes litigation; management and strategy consulting contacts cite a recent upswing in business.
Contacts report little to no cost increases, with the exception of higher travel costs, and are keeping their prices relatively unchanged. Most contacts record some hiring, mostly in the low single digits, although one contact in government policy consulting has increased staff by 25 percent since last year to address a large backlog and ongoing demand growth. Plans for future hiring are modest.
Most contacts expect a continuation of current growth trends for the rest of 2012 and are more bullish about 2013. Respondents express concern about factors with the potential to slow the macro economy, such as political uncertainty, the fiscal cliff, and Europe. Several firms rely heavily on government spending and are thus especially concerned with the fiscal situation and upcoming election. Nevertheless, no respondent expects another recession and the overall tone is cautiously optimistic.
Commercial Real Estate
Contacts across the First District report that commercial real estate fundamentals have been basically flat in recent weeks. Leasing activity is said to be down in Boston as firms say political uncertainty makes them reluctant to make leasing commitments in advance of the national election. At the same time, the credit environment remains favorable, as interest rates on commercial real estate loans remain very low by historical standards. One contact notes that the supply of high-quality commercial properties for sale has declined recently, and hypothesizes that owners have nowhere better to park their money right now. Construction activity is proceeding as expected on large commercial projects in Boston. While the multifamily sector remains strong across the region, with numerous apartment buildings under construction in Boston in particular, one contact surmises that additional apartment projects under discussion may be delayed or shelved pending rent discovery once current projects come on line.
Contacts express a mix of cautious optimism and generalized uncertainty concerning the outlook; the fiscal cliff and Europe are noted as key risks to growth. Some contacts mention a longer-run concern regarding the consequences of an inevitable eventual increase in interest rates; the risk is that net operating incomes will not increase enough to offset increased financing costs when loans currently being underwritten at very low rates require refinancing.
Residential Real Estate
Year-over-year sales growth continued in August in both single-family home and condominium markets throughout the First District. According to contacts, low interest rates and affordable prices contributed to improving sales figures, along with increases in residential rents. Several contacts report improving conditions for borrowers, but many contacts say that qualifying for a mortgage remains difficult. As for prices, contacts in the region report mixed movements in median sale prices, with some areas experiencing modest price appreciation and others moderate depreciation. In the Greater Boston area, contacts say a slight decline in the median sale price was unexpected in light of significant demand and dwindling inventory levels; they attribute the decline to significant increases in the sales of low to mid-tier properties. Throughout the region, inventory continues to decline. Contacts say they fear declining inventory will discourage buyers searching for homes as well as potential sellers who may not be able to find another well-kept property. Increasingly, properties in "move-in condition" receive multiple bids, sometimes above original asking prices.
Contacts expect sales to continue to grow on a year-over-year basis in the next several months. Nonetheless, many note that the recovery remains fragile and could be derailed by deterioration in economic conditions. Declining inventory levels also remains a concern, but several contacts expect an influx of sellers in the spring market. Median sale prices are expected to remain flat or improve modestly in the coming months.
Return to top
Second District--New York
Economic activity in the Second District has held steady since the last report. Prices of finished goods and services have generally been stable. The labor market has shown further signs of softening, as fewer business contacts report that they are adding workers, and a major employment agency describes hiring activity as sluggish. Retailers, including auto dealers, note some leveling off in sales activity following increases. Tourism activity has generally held steady at a high level, though there were some indications of softening in mid-September. Residential real estate markets have shown further signs of improvement. Office markets have shown some signs of slackening, but industrial markets have picked up modestly. Finally, bankers report increased loan demand, except on consumer loans, steady to tighter credit standards, and lower delinquency rates on commercial loans and mortgages.
Consumer Spending
Retailers report that sales activity has remained flat in recent weeks. A major retail chain reports that sales in the region were sluggish in August and especially in September, running well below comparable 2011 levels. Some of the weakness is attributed to unseasonably mild weather, which dampened sales of seasonal merchandise. A major mall in upstate New York describes sales activity as "stagnant", with sales flat to down slightly from a year ago in August and September. The pricing environment is described as quite promotional, and acquisition costs of goods are characterized as mostly stable to declining modestly. Auto dealers in upstate New York report steady sales activity. New vehicle sales were up 6-9 percent from a year earlier in August but are projected to be flat to up slightly in September. Sales of used cars have been mixed since the last report, while dealers' service departments note some slowing in business. Wholesale and retail credit conditions remain favorable.
Tourism activity has been steady at a fairly robust level since the last report, despite hints of weakness in mid-September. A trade association survey conducted in September indicated that 70 percent of hoteliers across New York State report that business over Labor Day weekend was at least as good as in 2011. Similarly, occupancy rates and room rates at Buffalo hotels are reported to be running well ahead of 2011 levels. Manhattan hotel occupancy rates were little changed at slightly over 90 percent in August, with room rates continuing to run a modest 2 percent ahead of a year ago. Anecdotal reports for September suggest that business remained strong in the early part of the month but tapered off a bit at mid-month. Similarly, weekly attendance and revenues at Broadway theaters were running ahead of comparable 2011 levels in August and early September but slipped well below year-earlier levels for the third week of the month. Finally, consumer confidence fell in August and was little changed at a low level in September, according to the Conference Board's monthly survey of residents of the Middle Atlantic states (NY, NJ, Pa).
Construction and Real Estate
Residential real estate across the District has continued to improve. Housing markets in metropolitan Buffalo reportedly flattened out in August but picked up sharply in September. Northern New Jersey's housing market has shown further modest signs of improvement, and there has been a sustained pickup in rental apartment construction, as builders appear to see a persistent shift toward renting. Home prices across northern New Jersey appear to recovering gradually--an industry expert notes that foreclosures and distress sales are no longer pushing down prices of other properties, though they are dampening any increase. Manhattan's co-op and condo market has remained stable--both in terms of sales activity and prices. The upper end of the market has been relatively strong, partly fueled by foreign buyers. Market conditions are reported to have strengthened in Brooklyn and especially Queens in the third quarter, while Long Island's housing market is weak but stabilizing. New York City's apartment rental market remains robust: rents have decelerated a bit in recent months but are still estimated to be rising at a 6-8 percent annual pace.
Commercial real estate markets showed signs of softening in the third quarter. In particular, office vacancy rates in metropolitan Syracuse, Albany, northern New Jersey, Westchester and Fairfield counties climbed to their highest levels in a number of years, while asking rents were flat to down slightly. Office vacancy rates also edged up in Manhattan, after drifting down over the first half of 2012. Sluggish leasing demand from financial and other firms is reported to be more than offsetting strong leasing demand from tech firms. A substantial amount of office space is scheduled to come onto the Lower Manhattan market in early 2013.
Industrial markets have strengthened: vacancy rates have declined modestly since the beginning of the year in northern New Jersey, Westchester and Fairfield counties, and the Buffalo and Syracuse areas; but rates have held steady in Long Island and metropolitan Rochester. Industrial rents have begun to rise modestly across most of the District for the first time in a number of years.
Other Business Activity
Manufacturers across the District indicate some further softening in general conditions since the last report, whereas contacts in most other sectors report that activity held steady. Both manufacturers and other contacts report little change in input price pressures since the last report, though a number of manufacturing contacts say they plan to hike selling prices in the months ahead.
Labor market conditions across the District have been tepid since the last report. Business contacts generally indicate that they have scaled back hiring activity in recent months, and almost as many business contacts say they plan to reduce as increase employment in the months ahead. A major New York City employment agency specializing in office jobs reports that hiring activity remained sluggish after Labor Day--a time when recruitment activity typically picks up. Moreover, the weakness is reported to be fairly broad-based, though most evident in the finance sector.
Financial Developments
Small to medium sized banks in the District report increased demand for all loan types except consumer loans, where demand was unchanged. Bankers also report increased demand for refinancing. Bankers report some tightening in credit standards for the household sector: roughly one in five bankers report tighter standards for consumer loans and residential mortgages, while no respondent reports easing standard in any individual loan category. Respondents indicate a decrease in spreads of loan rates over costs of funds for all loan categories except for consumer loans. The decrease in spreads was most prevalent in commercial mortgages. Respondents also indicate a decrease in the average deposit rate. Finally, bankers report some decrease in delinquency rates for commercial and industrial loans and commercial mortgages but no change for consumer loans and residential mortgages.
Return to top
Third District--Philadelphia
Aggregate business activity in the Third District has continued to improve--growing modestly--since the previous Beige Book. A couple of sectors grew faster than the average, while a few declined slightly. Manufacturing activity declined somewhat, although a slight increase in new orders may presage a turnabout. Retail sales growth has continued at a modest pace since the last Beige Book, while auto sales have continued to increase at a strong pace. Lending volumes at Third District banks have continued to grow modestly, and credit quality has continued to improve. Sales of new homes have slowed since the previous Beige Book period, while brokers report strong growth in sales of existing homes (from previously low levels). Commercial real estate contacts reported less leasing activity and continued weak demand for new construction. Service-sector firms reported mixed results with stronger tourist visitation, a slowing defense sector, and modest growth across most other service sectors. Price pressures have changed little since the last Beige Book.
The overall outlook appears somewhat more optimistic relative to the views expressed in the last Beige Book, as contacts are beginning to look beyond the pending election and looming fiscal cliff. Expectations among manufacturers improved significantly for overall activity over the next six months, while plans for capital spending and hiring were mixed. Auto dealers and real estate firms are more optimistic, as their positive trends gain traction. Holiday sales expectations are strong among many general retailers. Financial- and service-sector contacts express a mix of views regarding the future--generally positive with varying degrees of caution.
Manufacturing
Since the last Beige Book, Third District manufacturers have continued to report overall declines in shipments, but a slight increase in new orders. Makers of lumber and wood products; stone, clay, and glass products; fabricated metal products; and instruments have reported gains since the last Beige Book. Lower activity was reported by makers of primary metals, industrial machinery, and electronic equipment. One manufacturer summarized the broad economic climate as a summer slowdown with sequential improvement, marked by a definite increase in August.
Optimism among Third District manufacturers that business conditions will improve during the next six months has grown significantly since the last Beige Book and is evident across most sectors. Plans were recently announced to restart the third of three District refineries that were all at risk of closing one year ago; the other two were previously rescued. Firms have raised their overall expectations of future hiring, but plans for capital spending have softened since the last Beige Book.
Retail
Overall, Third District retailers reported little change between the modest year-over-year sales growth in August compared with July, although one contact stated that his store experienced the strongest Labor Day weekend in years. This year's sunny weather certainly helped compared with last year's storms. One department store manager reported that back-to-school sales did well, cold-weather clothing is moving better than last year, and discretionary "fun" items are selling well. Retail contacts are bullish for the upcoming holiday season, speculating that people will be primed to respond to upbeat holiday advertising after the long, negative political campaign season. An expectation of greater seasonal hiring has been widely discussed. And the holiday calendar provides a 32-day shopping season--the longest possible.
There has also been little change in the pace of auto sales since the last Beige Book. Pennsylvania dealers reported ongoing moderate growth in August; New Jersey dealers recorded a third consecutive strong sales month in August and described September sales as "good." The outlook among dealers remains positive. One contact stated "confidence is back, credit is back, and leasing is back." However, dealers remain somewhat cautious through this political season regarding consumer uncertainty.
Finance
Overall, Third District financial firms have reported continued growth since the previous Beige Book. Loan volumes grew modestly across most categories. Contacts describe fierce competition for small business loans from large and small banks. Despite high charge-off rates and ongoing household deleveraging, credit card outstandings have been virtually flat since the last Beige Book. Most contacts report that the financial health of households, businesses, and financial institutions continues to improve. The overall outlook among lenders remains positive.
Real Estate and Construction
Residential builders reported a drop-off in traffic and slower sales in August and early September--a disappointing conclusion to their primary sales season. Builders lament that people are choosing to rent rather than buy even when local rents exceed the total cost of owning a home. Residential brokers reported somewhat stronger year-over-year sales growth in August than expressed in the last Beige Book and continued strength into September. Inventory levels of real estate listings remain at lower levels than one year ago with no signs of a large emerging shadow inventory. Multiple bids are reported for homes priced between $250,000 and $400,000; more very high-end listings are beginning to appear and test the market. Builders and brokers remain cautiously optimistic.
Nonresidential real estate contacts reported a big slowdown in August and a disappointingly small rebound in September. However, conditions remain better than one year ago, with more prospects, faster decision-making, and few downsizings outside of southern New Jersey. There is very little demand for new office/commercial buildings, but the industrial market remains strong, especially in the Lehigh Valley and central Pennsylvania markets. Center City Philadelphia and adjacent areas in West Philadelphia and the Navy Yard are an exception, with very busy design/build work for higher education, hotels, and multifamily apartments and condominiums. However, many professional architects and engineers--experienced and novice--remain out of work or underemployed. Nonresidential real estate contacts retain an outlook of slow, steady growth.
Services
Third District service-sector firms have reported mixed growth since the last Beige Book. Tourist areas along the Delaware and New Jersey shores, in the Poconos, around Philadelphia, and throughout central Pennsylvania have reported strong visitation and/or lodging numbers relative to recent years. Atlantic City casinos and some neighboring shore areas were exceptions. Jersey shore businesses expressed considerable disappointment over cautious tourist spending; Delaware shore business also noted some caution. However, the tourist season concluded on a high note as the Labor Day weekend benefited by comparison to last year when severe weather disrupted end-of-summer plans. District staffing firms reported little change in orders, hiring mix, and wages. One firm continued to report extremely busy orders for manufacturing workers--better than in recent years--but expects a seasonal decline beginning in October. Demand for professional/business and health-care staff remains slower. Defense-related firms reported that there are fewer large contracts on which to bid and that they have continued to lower their expectations for 2013 and 2014 as sequestration or an alternative budget deal nears. Overall, other service-sector firms report a modest but positive outlook for six months out.
Prices and Wages
Price levels have continued to show little overall change since the previous Beige Book. Once again, cost factors have risen slightly among manufacturing firms but the increase is less than it was during the previous Beige Book; prices received by manufacturers fell. Homebuilders and retailers indicated few significant changes in their cost pressures or prices they charge. One homebuilder attempted to raise prices but couldn't make them stick. Real estate contacts continue to report that lower-cost homes have reached a price floor in most markets and are beginning to rise slightly in some neighborhoods. Leasing agents have been unable to charge higher leasing rates in nearly all markets, except for industrial space along the corridor from Carlisle, PA, to the Lehigh Valley. Contacts from all sectors report little or no wage pressures, other than for medical benefits.
Return to top
Fourth District--Cleveland
Business activity expanded in the Fourth District since our last report, although the rate of growth remains modest. On balance, manufacturing output rose. In the real estate sector, nonresidential construction picked up, while reports on single-family housing starts were mixed. Sales of existing family homes increased. Retailers and auto dealers saw a modest improvement in sales during August and September on a year-over-year basis. Shale gas activity continued at a robust pace, while coal production fell below prior-year levels. The slowdown in freight transport volume, which began in the second quarter, has abated. And the demand for business and consumer credit moved slightly higher.
Little net hiring was reported across industry sectors. We heard a number of reports that recruiting qualified workers for open positions remains difficult. Staffing-firm representatives said that the number of job openings and placements has slowed during the past six weeks. Vacancies were found primarily in healthcare and manufacturing. Wage pressures are contained. Input prices were stable, apart from increases in some agricultural commodities and petroleum-based products.
Manufacturing
District factories reported that production levels were stable or increased during the past six weeks, while new orders weakened. Rising production was mainly limited to goods sold to the construction, energy, and transportation sectors. Compared to prior-year levels, output was higher for a majority of our contacts. Several producers pointed to a rise in inventories, but said that they are manageable. The outlook by manufacturers was mixed. Steel producers and service centers reported that shipping volume was flat or down and they continued to reduce their inventory. A seasonal pickup that typically begins in September has yet to materialize. Several contacts noted that competition (volume and pricing) from offshore producers has intensified. Steel producers do not expect market conditions to change appreciably in the upcoming months. District auto production recovered in August on a month-over-month basis, as auto plants returned to normal production schedules. Compared to a year ago, production figures were down slightly for domestic producers, while showing a moderate rise for foreign nameplates. The latter is attributable to the abatement of supply chain issues.
Little change in capacity utilization was reported, although a majority of our contacts said that rates were slightly below normal levels. Capital spending remained on track, but several producers intend to delay some projects during the upcoming months. Raw material prices were either flat or trended lower, while finished goods prices were steady. Little change in payrolls was noted, although attracting skilled workers remains very difficult. Wage pressures are contained.
Real Estate
Reports from home builders on single-family housing starts were mixed. Compared to a year ago, construction activity was described as similar. On balance, builders expect a modest rise in new-home construction in the near term. Spec building remains on the low side, due in part to difficulty in obtaining financing. List prices of new-homes held steady, though most builders indicated that they have cut back on discounting. Sales contracts were found across all price-point categories. Reports of higher prices for lumber, shingles, and concrete were widespread, rising mainly in the mid-single digits. Sales of existing homes continued to show improvement, although inventory is tight in the mid-price range.
Nonresidential contractors reported that business activity continued to improve, and most are satisfied with their backlogs going into 2013. Project work is driven by industrial (manufacturing and energy), education, healthcare, multi-family housing, and some public works. Most contractors expect that the momentum built up this year will be maintained in 2013, though some commented that customers seemed hesitant about moving forward at this time. Material price increases were mainly limited to petroleum-based products.
Residential and nonresidential builders reported little change in their payrolls. Some seasonal layoffs are expected. A few builders said that they would like to hire more workers but are hesitant to do so because of uncertainty surrounding the upcoming election and the fiscal cliff. Wage pressures are contained, but sharp increases in health insurance premiums were noted by many contacts. Subcontractors are holding their prices steady and many are finding it difficult to recruit skilled trades.
Consumer Spending
Retailers reported a modest improvement in sales during August and September relative to year-ago levels. Consumers have responded positively to new lines of fall merchandise and back-to-school sales were characterized as good. Some retailers noted that consumers in middle-income brackets have entered a holding pattern until after the elections. Our contacts expect growth in the fourth quarter to be in the low-to-mid single digits relative to 2011. Vendor pricing has been stable, with little change in shelf prices. Grocery store chains reported that their costs have risen due to the summer drought. Attempts at passing through higher food prices were met with mixed results. Capital spending for the year remains on target. Two retailers noted that they may accelerate spending before year's end, mainly for distribution equipment. No permanent hiring is expected other than at new stores. The number of temporary workers expected to be hired for the upcoming holiday season is planned to be a little higher than last year.
New-vehicle sales were stronger in August and September when compared with the same time period a year ago. Dealers reported that sales of fuel-efficient cars and crossover vehicles are doing particularly well. New-vehicle inventories increased since our last report and most dealers described them as acceptable. Dealers expect little change in monthly sales for the remainder of 2012. Used-vehicle sales were flat, which was attributed primarily to a lack of inventory. Most dealers reported that credit is more readily available and leasing is growing in popularity. Hiring for sales and service positions remains at a slow pace. Recruiting qualified people is challenging.
Banking
Demand for business credit moved slightly higher since our last report, with requests mainly for commercial loans and refinancings. Several small business owners told us that it remains difficult for them to obtain credit. The interest rate environment was described as very competitive. Consumer lending was up a little, driven by demand for auto loans and home equity lines of credit. In the residential mortgage market, activity is fairly strong. Although a majority of applicants are still looking to refinance, many bankers noted an increase in new-purchase requests. No changes were made to loan application standards. Delinquency rates continued to improve across consumer loan categories; however, several bankers reported an uptick in delinquencies from commercial customers. Core deposits grew, especially in transaction accounts. Bankers expect little change in payrolls for the remainder of this year.
Energy
Conventional oil and natural gas production held steady during the past six weeks, with little change projected in the upcoming months. Wellhead prices for natural gas rose slightly. Drilling rigs are migrating from other states to Ohio to take advantage of the higher-priced wet gas found in the Utica shale. To date, 375 permits have been issued in Ohio for drilling horizontal shale gas wells. Thirty wells are now producing, with 50 expected to be in production by year's end. Coal producers reported production declines in 2012 of between 10 and 50 percent over prior-year levels due to lower demand from electric utilities and a stricter regulatory environment. Reports of idled mines are widespread. Spot prices for export metallurgical coal declined further, while domestic steam coal prices rose slightly due to tight supplies. Production equipment and materials prices were flat in most categories, other than for diesel fuel. Capital outlays remain at projected levels. Several coal operators announced layoffs. In Ohio, a regulatory agency more than doubled its employment size over the past 12 months to cope with expanding shale gas activity.
Freight Transportation
Reports on freight transport indicated that volume is returning to normal trends after a second-quarter slowdown. Industries which contributed to the pickup include automotive, construction, and shale gas. However, lower-than-expected harvests have negatively impacted revenues for some carriers. Most of our contacts believe that their companies' growth objectives for 2012 will be met. Apart from fuel prices, costs associated with truck maintenance held steady. Carriers have successfully passed through higher diesel prices via a surcharge. Reports on capital spending were mixed. Half of our contacts said that 2012 expenditures are on track. Others reported a slowdown or postponement in purchasing new trucks, citing a sluggish economy, uncertainty about the fiscal cliff, and difficulty obtaining financing. Hiring is for replacement and adding capacity. Recruiting qualified personnel remains difficult, which is contributing to wage pressures.
Return to top
Fifth District--Richmond
Fifth District economic activity improved modestly since our last report. Most manufacturing contacts reported activity firmed somewhat. Port activity continued to expand. Retailers reported that sales grew on balance, and non-retail firms cited marginal revenue expansion. Lending activity improved somewhat, although most applications continued to be for refinancing. Residential real estate activity continued to strengthen; however, areas of weakness remained in the District. Tourism contacts reported healthy bookings as the summer season ended. Commercial real estate reports were mixed for private-sector projects and weaker for government-related projects. Labor market reports were also mixed, with accounts of modest increases in employment along with major layoffs and hiring freezes. Price changes were generally small in the manufacturing and services sectors in recent weeks.
Manufacturing
District manufacturing activity firmed somewhat after having softened in earlier months. An auto supplier reported that his firm's sales continued to exceed expectations, which required overtime and additional hiring. A manufacturer of wallboard indicated that sales at his company rose, with the last few weeks being the busiest this year. A manufacturer of residential door frames said that demand in late summer was fairly flat, but he expected sales to improve over the next six months. In contrast, a producer of electrical components cited very weak business conditions, which resulted in layoff announcements and plans to close the factory at the end of this year. According to our latest survey, growth slowed in prices of both raw materials and finished goods over the past month.
Activity at most District ports expanded over the last few months. Port officials reported that both import and export activity strengthened, although one official attributed some of the gain to increased market share. According to another contact, the shipping season peaked earlier than in past years, which may have been due to manufacturers and retailers moving goods in advance of a threatened labor disruption at East Coast ports. Nonetheless, imports were bolstered by continued demand for commodities and components used by manufacturers. One contact stated that exports to China of some commodities and bulk goods were holding up better than expected. In addition, exports of autos and heavy machinery to Europe remained strong.
Retail
Retail sales reports from our contacts were mixed, with modest improvement on balance. In Virginia, a grocer stated that customer counts were up, but shoppers were spending less, while another grocery contact commented that he will be opening several new stores by early next year. A major building supply firm reported a significant increase in the volume of wallboard sales; other inputs for major renovation work also picked up. Several small retailers said that they were preserving margins by reducing payrolls and cutting expenses. However, collections on customer accounts have become a bigger problem, according to one contact. Merchants remained somewhat guarded in their outlook for spending during the holiday season. Small retailers were conservative with inventories; they expected that their suppliers would be flexible enough to make quick shipments if reorders should be needed. To help push early purchases, several big-box retailers were advertising a return of their lay-away programs, and other merchants started offering lay-away for the first time. In addition, a number of internet retailers were offering an online lay-away program. District automobile sales varied, according to dealers. A contact at a large dealership reported high foot traffic, observing that buyers gravitated to "the deals," such as substantial rebates. Retail prices rose at a somewhat slower pace in recent weeks, according to our latest survey.
Services
Non-retail services providers reported slight gains overall since our last report. Business activity strengthened for professional, scientific, and technical services firms; a contact at a Maryland telecommunications firm noted that demand was strong for tech-related security services. However, there were also reports that the possibility of government spending cuts associated with sequestration caused firms to delay business decisions. One industry executive commented, "We are hoarding cash." Healthcare firms continued to restructure to accommodate the post-reform environment in that sector. According to a contact at a private healthcare group, that organization had begun shifting away from low margin, basic services. A Virginia airport executive noted that increased passenger traffic in recent weeks had recovered from a drop earlier in the summer. Prices moved up more slowly at services firms.
Finance
Lending activity improved marginally from weak levels since our last report. One banker reported continued strength in refinancing demand, which accounted for three out of four commercial loan applications. A North Carolina banker noted that, while most home mortgages were for refinancing, applications were fifty percent above normal levels and over one third were for either purchasing or building a home. Demand for commercial loans across the District was mixed, according to several contacts, with modest improvements coming from the medical, legal, and other services-related segments of the market. An official at a large bank described consumer demand as remaining weak, with the notable exception of auto loans, while business loans for capital equipment improved slightly. Several bankers stated that credit standards remained tight for consumer loans, but some easing had occurred in order to capture attractive commercial loan applications. A commercial banker said that uncertainty about whether a successful SBA program would be renewed had curtailed his ability to get approval of several viable small business loans.
Real Estate
Residential real estate activity improved since our last report. A Realtor in the Richmond area said that closings were up double digits over last year and prices were rising slightly. Properties below the $200,000 range, in particular, were selling more quickly. However, an agent in the D.C. area indicated that housing sales in the $800,000-plus range were rising relatively quickly, adding that the lowest inventory for housing in eight years was pushing up prices. A Realtor in the Fredericksburg area reported that her agency was extremely busy for this time of year and indicated that sales were up forty percent over last year; she expected the stronger market to continue. Moreover, a Maryland contact mentioned that foreclosures in central Maryland had fallen thirty percent from the previous quarter, which bolstered housing prices. In contrast, a report described the housing market in North Carolina as mostly unchanged, with the exception of an improvement in the Research Triangle. Also, a source stated that there had been a slowdown in housing in the Hagerstown area.
Commercial real estate and construction activity remained mixed since our last assessment. A Realtor in North Carolina stated that both leasing and sales activity had slowed since June, with some tenants switching to shorter leases. Another agent reported moderate increases in office leasing, especially in suburban locations. Several contacts in Virginia and West Virginia noted increased interest from clients but few closings. A Virginia Realtor said that retail leasing had improved, but it was "still a bumpy road" and that leases were "taking forever to close." Both leasing and construction-related activity in the industrial sector was sluggish. Several contractors reported that government-related projects continued to weaken or decline. New private sector projects also started to decline in recent weeks. A large contractor in Maryland expected that few new projects would emerge until after the election. However, a banker noted that small developers were joining together to buy and renovate low-priced B and C Class properties, in anticipation of an improved real estate environment next year.
Labor Markets
We received mixed signals on labor market activity over the last few weeks. A source from West Virginia reported that the state experienced several major layoffs related to mine closings and bankruptcies. A contact in Hagerstown said that the local labor market continued to recover, but at a slow pace, and that the area would lose a major manufacturer later this year. Moreover, an auto supplier in Virginia stated that his firm had frozen hiring and would reduce staff through attrition. In contrast, several employment agencies cited an increase in demand for workers, particularly among goods-producing industries. At a North Carolina staffing agency specializing in finance, companies were actively hiring staff and senior level accounting and finance professionals. In the retail sector, an industry representative mentioned that many small retailers expected to add hours for permanent employees during the upcoming holidays, rather than hire seasonal workers. According to our recent surveys, average wages in both the manufacturing and services sectors were growing at a slightly quicker pace than a month ago.
Tourism
Hoteliers, restaurateurs, and other tourism contacts reported stable but solid leisure business going into the autumn season. In addition, their outlook was upbeat for late fall and early winter. An hotelier in western Virginia stated that business was solid, with a trend toward more last-minute leisure bookings. A tourism contact in Washington, D.C. reported seeing "tour buses galore" and crowds on the mall. Tourist activity on the outer banks of North Carolina was steady, and good attendance was expected for upcoming music and food festivals. Hotel and rental rates were not being discounted, although incentives were offered for time slots that were difficult to fill. In contrast, hotels that depend heavily on government-sponsored bookings reported a significant drop in business.
Return to top
Sixth District--Atlanta
Sixth District business contacts described economic activity as expanding slowly in September, and most expect little change in the near term.
Most retailers cited slow sales growth while auto dealers continued to experience strong results. Hospitality reports remained largely positive, with the exception of cruise-lines. Residential brokers and builders signaled that housing conditions continued to improve in many parts of the District as sales and prices of new and existing homes slightly increased compared with a year ago. Commercial development continued to improve, led by multifamily construction. Manufacturers indicated that new orders had softened while production levels only mildly increased. Bankers saw improvements in demand for overall loans, particularly those for housing purchases and refinances. Payrolls expanded modestly on net, and firms noted some deceleration in input prices, while wages remained relatively unchanged.
Consumer Spending and Tourism
Most District merchants reported that sales growth remained slow in September. Discount retail operations outperformed traditional department stores. Most retailers projected continued soft growth in sales through the end of 2012. Contacts in the auto industry reported that strong sales levels were maintained in September.
Leisure and business travel contacts continued to report strong activity and an optimistic outlook for the remainder of the year. Occupancy and room rates as well as convention bookings were solid. While there has been some drop in traffic from Europe, this was largely offset by strong visitor numbers from Canada and Latin America. Cruise-line bookings and onboa
Source: http://www.businessinsider.com/federal-reserve-beige-book-is-out-2012-10
memphis grizzlies celebrity apprentice grizzlies bronx zoo crash april 30 wwe extreme rules 2012 vontaze burfict
কোন মন্তব্য নেই:
একটি মন্তব্য পোস্ট করুন