Springfield employment leads in Fed Reserve regional report

Paced by durable goods production, Missouri manufacturing employment is on the upswing in the Federal Reserve’s St. Louis district, and private-sector employment in the Springfield area is leading modest growth in the region’s urban centers.

According to the Fed’s third-quarter survey of economic conditions, released Sept. 23, nonfarm payroll employment growth picked up slightly across most of the region’s metropolitan statistical areas in central and eastern Missouri and southern Illinois. Tops was the 2.7 percent increase recorded in the Springfield MSA. The report cited a 3.8 percent gain in the private service sector, compared to a year ago, but a 1.4 percent drop in local goods-producing jobs. Jobs in the Springfield area’s government sector were roughly flat.

Throughout the St. Louis region, the unemployment rate averaged 6.6 percent in the second quarter, down sharply from the previous quarter’s average of 7.2 percent.

With the shift in unemployment, the survey found nearly half of the business contacts in August expected local economic conditions to improve in the second half of the year. But respondents don’t anticipate a quick reaction in hiring. For the remainder of the year, 55 percent expect employment to remain about the same, and 33 percent say employment will be somewhat higher or higher than last year.

Springfield also was noted in the report for a 2.9 percent drop in single-family building permits, compared to a year ago. Residential construction slowed in most areas in the quarter, and builders noted they are facing higher benchmarks from 2013.

On the consumer side, the Fed said household balance sheets improved across the St. Louis region, as mortgage and credit card delinquencies fell significantly and balances continued to contract.

As a result, banks in Missouri and southern Illinois registered a second-quarter increase in profits and a drop in nonperforming loans. Roughly one-fourth of bankers surveyed expected loan demand to increase in the second half of 2014.