Report: Consumer spending climbs, while manufacturing sector softens

The report covers the Fed’s eighth district, which includes parts of Missouri, Kentucky, Tennessee, Illinois, Indiana and Mississippi, and all of Arkansas.

Manufacturing and services

Manufacturing activity in the region continued to slow, as many surveyed firms reported plans to lay off workers or close facilities.

Firms in the auto parts, plastics, apparel, food, furniture, paper product and electronic product industries reported plans to close plants, while firms in the motor vehicle, plastics and household appliance industries said they planned to conduct significant layoffs.

In contrast, firms in the steel product and machinery industries announced plans to open or expand facilities, and firms in freight transportation, water transportation and traveler accommodation services reported plans to open new facilities or add workers.

Consumer spending

Retail sales were up in January and the first half of February from a year ago. About 75 percent of retailers saw sales increases, while 17 percent said they saw declines.

Apparel and electronics were strong sellers, but seasonal items moved more slowly.

Car dealers reported that sales for the period were flat compared to the previous year. About 52 percent surveyed said they saw a decrease in sales, while 35 percent reported an increase. About 71 percent of dealers said they expect to see increased sales for the next two months.

Real estate and construction

Home sales were mixed, according to the report, as January sales were unchanged in St. Louis and Louisville, Ky., but fell 2 percent in Little Rock, Ark., and 2.7 percent in Memphis, Tenn.

Residential construction declined throughout the district, while the commercial real estate market improved. Commercial permits increased, and the district’s overall office vacancy rate fell.

Agriculture

Winter wheat in Missouri is reportedly in fair to poor condition due to extreme cold temperatures in January.

The report also notes that from 2005 to 2006, field crops across the district rose in value by 35 percent.[[In-content Ad]]