The Federal Reserve's Feb. 29 Beige Book for the reserve's Eighth District, which includes Springfield, shows increases in the manufacturing, services and consumer spending sectors. The report also points to a residential real estate market in continual decline and little change in the banking and finance industry.
Manufacturing and servicesSeveral manufacturers in the Midwest reported plans to open plants and expand operations in the near future, while a smaller number of firms were planning closures or decreased operations, according to the report.
Manufacturing firms in the furniture, automobile, food, stone product, air conditioning component and medical device sectors reported plans to increase existing operations and hire additional employees. Firms in the auto parts and primary metal manufacturing industries announced plans to open new plants and hire new workers.
Plans to lay off workers and close plants came from firms in the the faucet, chemical, paper product and lawn mower manufacturing industries.
The district's services sector has continued to increase since the Federal Reserve's previous report in early January. Information technology, pest control, distribution, health and leisure firms announced intentions to expand operations and hire new workers. However, service firms in the freight transportation, education, government and business support reported plans to scale back operations and lay off workers.
Real estate and constructionHome sales were on the decline in most of the metropolitan areas cited in the Eighth District. Homes sales in 2011 were down 3 percent in St. Louis, 6 percent in Little Rock, Ark., 4 percent in Louisville, Ky., and 2 percent in Memphis, Tenn., compared to 2010. Reports for residential construction also showed decreases. Single-family housing permits in 2011 decreased 21 percent in St. Louis, 20 percent in Little Rock and 15 percent in Louisville. Permits did increase by 1 percent in Memphis.
The February Beige Book reported mixed results in the commercial and industrial real estate industries. Contacts in St. Louis noted an increased in fourth-quarter office industrial vacancy rates, compared to the third quarter. Northwest Arkansas contacts said commercial building construction increased in the Bentonville area, but Little Rock contacts reported weak construction activity.
Banking and financeSenior loan officers surveyed at a sample of large banks in the Eighth District said lending activity was flat during the fourth quarter.
During the period, credit standards and demand for commercial and industrial loans remained unchanged. Credit standards for commercial real estate loans also were unchanged, though demand for the loans ranged from unchanged to slightly stronger, according to the report. Credit standards for consumer loans were unchanged, and demand was either the same or slightly weaker. For prime residential mortgage loans, credit standards ranged from unchanged to slightly eased, while demand was unchanged or moderately stronger.
Consumer spendingAverage retail sales in January and early February were slightly higher than the same period in 2010. Half of the Fed's retail contacts saw increases in sales, 37 percent reported decreases, and 13 percent had no change. The sales outlook for March and April showed that 65 percent of retailers expect sales to increase compared to 2011 levels, while 13 percent expect decreases and 22 percent are predicting flat sales.
About 48 percent of car dealers surveyed reported sales increases in January and early February, 32 percent saw decreases and 20 percent reported no change. Car dealers also were optimistic looking forward, as 76 percent felt sales would increase in March and April compared to 2011, while 4 percent predicted sales decreased and 20 percent projected similar sales figures, according to the report.
The
Beige Book, published eight times a year, summarizes anecdotal information on current economic conditions and is separated into 12 districts.
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