Business conditions in the Federal Reserve's eighth district, which includes Springfield, and across the country have continued to deteriorate since September, according to the latest Beige Book report released Wednesday.
Manufacturing activity continued to decline in the district, as contacts generally cited weak product demand and higher input costs. A few manufacturers reported plans to open plants or expand operations in the near future, but a larger number of contacts reported that they plan to close plants and reduce operations.
The services sector also continued to decline in most areas. Firms in the medical, information, financial and trucking industries reported weak demand and plans to reduce their work forces. Retailers reported that sales volume remained fairly constant but consumers have shifted to lower-priced products. Auto dealers said sales were up slightly, particularly for those who offer customer incentives and rebates.
Home sales continued to fall, with double-digit percentage declines in the district's major cities, and residential construction was down, as single-family housing permits fell in nearly all of the district's metro areas. Activity in commercial construction, meanwhile, remained mixed. Some contacts reported record levels of committed projects for 2009, while others reported that backlog had decreased. Others said the industrial real estate market is holding steady.
Total loans outstanding at a sample of small and mid-sized banks in the district fell 1 percent between mid-June and mid-September. Real estate lending decreased 1.5 percent and accounted for 73.5 percent of total loans, while commercial and industrial loans dropped 0.8 percent, accounting for 16.9 percent of loans. Loans to individuals, accounting for 5.1 percent of loans, increased 4.1 percent. Total deposits at the sample of banks were flat.
Crop harvests throughout the district were delayed by heavy rains in some areas. Overall crop conditions deteriorated slightly since the last Beige Book report, and yield estimates of corn and rice in Missouri declined from August to September.
The Beige Book is issued eight times a year and is based on anecdotal information on current economic conditions collected from business contacts, economists and market experts.
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
