December 2, 2009
Federal Reserve Districts
|Skip to content
Economic conditions in the Third District have been mixed in recent weeks. Manufacturers, on balance, reported an increase in shipments and a steady rate of new orders. Retailers indicated that sales have been rising slowly, although they remained below the year-ago level for most stores. Motor vehicle dealers indicated that sales have improved somewhat, although dealer closings continued. Third District banks generally reported decreasing loan volume outstanding and further declines in credit quality. Residential real estate agents and home builders noted mostly unchanged sales rates. Nonresidential real estate leasing and construction activity continued to decline. Service-sector firms generally reported that activity continued to be slow. Business firms in the region reported mostly level prices, although some indicated that prices of some basic commodities have increased recently.The outlook in the Third District business community remained lackluster in November. Manufacturers forecast a rise in shipments and orders during the next six months, on balance, although the balance of positive views has eased in the past month. Retailers have mixed views, but on balance they expect sales for the holiday shopping period this year to roughly match last year. Auto dealers expect sales to improve in the near-term, although they say the number of dealers remaining in business will continue to decline. Bankers anticipate demand for credit to remain weak though the winter. Residential real estate contacts believe housing demand will continue to firm up, but they do not expect a substantial increase in sales until sometime next year. Contacts in nonresidential real estate expect leasing and construction to remain weak well into 2010. Service-sector firms expect activity to remain near current levels in the near term.
Third District manufacturers expect business conditions to improve during the next six months, on balance. Among the firms polled in November, about half expect new orders and shipments to increase during the next six months; about one-tenth expect decreases. Although the balance of opinion among area manufacturers remains positive, it is slightly less optimistic than it was earlier in the fall. Nevertheless, the number of manufacturing firms planning to increase capital spending plans has risen slightly.
Most Third District retailers have cautious views of year-end holiday shopping period. Forecasts vary from slight year-over-year increases to small year-over-year declines. Retailers, including those expecting gains, have limited their inventories of merchandise for the holiday period, and many have shifted their merchandise mix to lower-priced items.Third District auto dealers reported some improvement in sales from September through early November. Dealers said the sales increase, although slight, was widespread across vehicle types. Nevertheless, closings of dealerships continued throughout the region, and more are expected. Looking ahead, dealers foresee continued improvement in sales for those who remain in business.
Real Estate and Construction
Nonresidential real estate firms indicated that leasing and purchase activity has continued to decline and that vacancy rates remain on the rise. Effective rents have been falling significantly, prompting some relocations and lease renegotiations by tenants, but no increases in occupied space. Contacts expect nonresidential real estate markets to remain weak well into next year. One contact said, "markets will remain under stress and uncertainty."
Reports on input costs and output prices have been mixed since the last Beige Book. Manufacturing firms noted some increases for the commodities they use but mainly steady prices of the products they make. However, some makers of food products and chemicals have raised prices. Retailers have generally kept their selling prices steady, and several noted that they were realigning product mixes to emphasize lower-priced merchandise.