Thursday, October 11, 2012

Fed Beige Book: Economic Activity Expands Modestly

by CoyDavidson on October 10, 2012

Excerpts from Summary of Commentary on Current Economic Conditions by Federal Reserve District

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.

Commercial Real Estate

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.

Eleventh District?Dallas

The Eleventh District economy expanded at a moderate pace over the past six weeks. Energy activity remained strong, and construction and real estate activity picked up as housing demand strengthened. Demand for business services improved slightly, and transportation services activity continued to expand. Reports on manufacturing activity were mixed. Growth in retail and auto sales slowed over the reporting period, but Eleventh District sales continued to outperform the national average, according to respondents. Lenders noted steady loan demand. Agricultural conditions improved slightly. Price and wage pressures were modest over the reporting period, and employment levels continued to edge up. Many respondents across industries said continued uncertainty about upcoming elections was clouding outlooks.

Construction and Real Estate

Single-family housing activity continued to increase at a good pace over the past six weeks. Contacts said new and existing home sales outpaced expectations, and new home construction activity increased. Inventories of both new and existing homes remained tight, leading to price gains. Apartment construction picked up since the last report, and outlooks for the multifamily sector remain quite optimistic. Leasing activity in the office and industrial real estate sectors remained steady at a good pace. While commercial construction remains at low levels, contacts expect activity to improve.

Fed Beige Book ? October 2012

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Source: http://www.coydavidson.com/economic-reports/fed-beige-book-economic-activity-expands-modestly/

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