Springfield, MO

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Car sales a bright spot in Fed report

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The Federal Reserve's November Beige Book for the reserve's Eighth District, which includes Springfield, found decreases in the  manufacturing and residential real estate sectors. The report noted an increase in automobile sales, mixed results in the commercial real estate and retail markets, and a flat banking industry.

The latest Beige Book survey, which measured activity in September and October and was released online yesterday, showed that several manufacturers have plans to close plants and decrease operations in the near future, while a smaller number of respondents plan to open plants or expand operations.

Plans to scale back operations and lay off workers were reported by firms in the primary metal product, surgical appliance and supplies, small-engine, paper and cleaning compound manufacturing industries. A major refrigeration equipment manufacturing firm, which wasn't named in the report, announced plans to close a plant and lay off a significant number of workers.

In contrast, plans to hire new employees were reported by firms in the fabricated metal, clothing, appliance, hair care product and air conditioning manufacturing industries, according to the survey.

Consumer spending
Roughly 46 percent of retailers reported an increase in sales, while 37 percent saw decreases and 17 percent said sales were about the same. A majority of respondents, 57 percent, said sales met expectations, 33 percent responded that sales were below expectations and 10 percent said sales were better than anticipated.

Car dealers in the district reported an increase compared to last year's levels. About 46 percent of the respondents reported sales increases, 33 percent saw decreases and 21 percent recorded no change.

Real estate and construction
Compared with the same period in 2010, home sales in September 2011 were down 6 percent in St. Louis; 9 percent in Little Rock, Ark.; 5 percent in Memphis, Tenn.; and 7 percent in Louisville, Ky. Residential construction also saw decreases, with the number of single-family housing permits down 23 percent in St. Louis, 25 percent in Little Rock, 10 percent in Memphis and 19 percent in Louisville.

The commercial and industrial real estate markets varied throughout the district. Third-quarter suburban office vacancy rates increased in Little Rock and Louisville but decreased in St. Louis and Memphis; downtown office vacancy rates increased in Louisville and St. Louis but decreased in Little Rock and Memphis.

In construction, the survey noted that contact in southern Indiana reported a slow commercial market. Contacts in Evansville, Ind., showed increased power plant construction, and south central Kentucky respondents reported industrial plant expansions. In St. Louis, contacts reported limited commercial and industrial construction activity.

Banking and finance
A survey of senior loan officers at a sample of large banks throughout the district found little change in overall lending during the third quarter compared to the second quarter. Credit standards for commercial real estate, residential mortgage and consumer loans remained virtually unchanged, while the standards for commercial and industrial loans ranged from unchanged to slightly eased.

Loan demand for the commercial residential and residential mortgage markets were either unchanged or slightly weaker; demand for consumer loans ranged from moderately weaker to moderately stronger.

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


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