January 12, 2011
Federal Reserve Districts
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Economic activity in the Eighth District has increased modestly since our previous report. Manufacturing activity has continued to increase, and the services sector has improved slightly. Early reports from general retailers indicate that holiday sales increased over a year ago. Home sales have continued to decline across the District, and commercial real estate and construction activity was sluggish. Overall lending activity at a sample of small and mid-sized District banks declined in the three-month period from mid-September to mid-December.
Manufacturing and Other Business Activity
Activity in the District's services sector has increased since our previous report. Contacts in the storage, business support services, restaurant, and health care industries reported plans to open new facilities in the District and hire new workers. In contrast, contacts in the hazardous waste disposal industry announced plans to decrease operations and lay off workers. General retail contacts noted that holiday sales increased compared with the same period last year. Sales of new automobiles have grown modestly in recent months, while used car sales have been mixed across the District.
Real Estate and Construction
Commercial real estate and construction conditions were sluggish throughout most of the District, but contacts anticipate improvements in some areas. A contact in Louisville noted that commercial real estate markets continue to struggle, although contacts expect improvements in the suburban office market in 2011. A contact in northwest Arkansas reported that commercial real estate markets are soft. Contacts in St. Louis noted that commercial construction activity was slow. Contacts in south-central Kentucky noted that commercial construction activity has been very limited, but they anticipate some recovery in the next few months. Contacts in northeast Arkansas reported a few new commercial construction projects in retail centers. Industrial construction activity remains slow throughout most of the District. A contact in St. Louis reported low levels of construction activity. Contacts in south-central Kentucky noted some manufacturing and healthcare-related projects. Contacts in Louisville and St. Louis reported more build-to-suit than speculative industrial construction.
Banking and Finance
Agriculture and Natural Resources