Fed report shows modest Midwest economy expansion

The report, released April 25, is for the reserve’s eighth district, which covers parts of Missouri, Arkansas, Kentucky, Tennessee, Illinois, Indiana and Mississippi.

Manufacturing and services

A few companies, working mostly in motor vehicles, plastics and machinery manufacturing, said they plan to open or expand facilities.

However, a larger number of surveyed companies reported plans to close plants or lay off workers, including manufacturers in electrical equipment, furniture, apparel, food and automotive parts.

Service firms in distribution, water transportation and administrative and support services said they plan to build new facilities and hire more workers.

Clothing retailers reported strong sales compared to 2006, while durable goods and big-box retailers said sales ranged from flat to down. Car dealers on average saw increased sales, particularly in used cars.

Real estate and construction

Home sales were mixed throughout the district, with increases in Kentucky and Arkansas, no change in the St. Louis area and a decline in Tennessee.

Residential construction was weak in most of the district, with drops in permits in most metropolitan areas. Commercial real estate markets remained strong, with most areas reporting high volumes.

Banking and finance

Total loans outstanding at a sample of small- and mid-size banks in the district increased 0.2 percent in the quarter, due partly to a 0.4 percent increase in real estate lending and a 0.7 percent increase in commercial and industrial loans. Meanwhile, loans to individuals fell 1.3 percent, and all other loans decreased 3.9 percent.

Overall, total deposits at district banks climbed 2.5 percent.

Agriculture

Surveyed farmers throughout the district said they expect to plant 20 percent more acres of corn, 76 percent more acres of sorghum and 5 percent more acres of tobacco this year compared to 2006.

In contrast, they plan to plant 11 percent fewer acres of soybeans, 30 percent fewer acres of cotton and 12 percent fewer acres of rice than last year.

This story originally appeared in SBJ’s April 30 free e-news Daily Update. Click here to register.