April 14, 2010
Federal Reserve Districts
|Skip to content
Economic conditions in the Eighth District softened in most sectors since our previous report. Manufacturing activity declined on balance, as did activity in the services sector. Although residential real estate markets remained weak, home sales and issuance of construction permits increased in some metropolitan areas of the District. Activity in the commercial and industrial real estate markets, construction in particular, remained weak throughout the District. Overall lending activity at a sample of small and mid-sized District banks decreased slightly in the first quarter of 2010 compared with the fourth quarter of 2009.
Manufacturing and Other Business Activity
The District's services sector also continued to decline despite the increase in temporary employment from the 2010 Census. Several regional government agencies and education services providers announced job cuts in response to declining budgets. A major firm in print and publishing services announced it will close a facility in the District. A large medical services provider also announced significant job cuts to achieve operational efficiencies. In contrast, a large regional transportation authority was awarded a major contract from the Department of Transportation, and a firm in business support services announced plans to hire new workers. Contacts in the retail sector noted the opening of several new establishments, particularly in the food industry. A major trade show also signed a long-term lease with a metropolitan area in the District. An auto dealer noted stronger than expected demand, particularly for light sport utility vehicles.
Real Estate and Construction
Commercial real estate and construction markets continued to struggle throughout the District. A contact in St. Louis expects commercial property foreclosures to rise. A contact in Evansville, Indiana, reported that major construction is still slow. A contact in northeast Arkansas noted that the only major construction projects are related to a local university and medical center. Industrial real estate and construction contacts throughout most of the District also continued to report a sluggish environment. A contact in Louisville described the first-quarter industrial real estate market as dismal. A contact in Memphis, however, indicated that industrial real estate may be showing signs of improvement. A contact in St. Louis expects little to no speculative industrial construction to take place in 2010.
Banking and Finance
Agriculture and Natural Resources