Beige Book shows manufacturing, services increases

Economic conditions in the Federal Reserve's Eighth District, which includes Springfield, increased moderately in January in manufacturing and services activity, according to the Beige Book report released Jan. 12.

The previous Beige Book report was released Dec. 1.

Manufacturing and other business activity
Manufacturing activity was affected positively by reports of several plants opening throughout the district, while a smaller number of plants were closing or reducing operations.

Firms in the automobile and automobile parts, plastics product, glass, furniture, sanitary paper products, and food manufacturing industries have released plans to extend operations and hire new employees. Firms in containers and wood products manufacturing announced plans to close plants and lay off workers.

The district's services sector showed increases from December, particularly in the storage, business support services, restaurant and health care industries, which reported plans to open new facilities in the district and hire new workers. Retailers said holiday sales increased compared to the same period last year.

Sales of new automobiles increased slightly, while used car sales have been relatively stagnant. Contacts in the hazardous waste disposal industry have announced plans to decrease operations and lay off workers.

Real estate and construction
Home sales showed continual decline. Year-to-date home sales in November were down 14 percent in St. Louis, 8 percent in Little Rock, 17 percent in Memphis, and 1 percent in Louisville, compared to the same period in 2009.

Residential construction, however, increased throughout most of the district. November year-to-date single-family housing permits increased in the majority of the district's metropolitan areas - by 4 percent in Little Rock and 6 percent in St. Louis. Louisville showed a 5 percent decrease.

Commercial real estate and construction was slow, but contacts have reported improvements on the horizon. Contacts throughout the district noted that conditions are currently sluggish but are anticipating more projects by year end.

Banking and finance
By sampling a selection of small and midsize banks in the district, the report determined that total loans outstanding have decreased 2.5 percent in the three-month period from mid-September to mid-December.

Real estate lending, which represents 73.3 percent of total loan lending, decreased 2.4 percent; commercial and industrial loans, which represent 16.3 percent of total loans, decreased 0.9 percent; loans to individuals, which represent 4.9 percent of total loans, decreased 6.1 percent; and all other loans, representing 5.5 percent of total loans, decreased 5.3 percent.

Total deposits increased 0.7 percent.

The Beige Book, released eight times a year, summarizes anecdotal information on current economic conditions and is separated into 12 districts.[[In-content Ad]]