December 2, 2009
Federal Reserve Districts
|Skip to content
Economic activity was mixed in October through mid-November, according to reports from Sixth District business contacts. A majority of retailers described activity as exceeding their modest expectations, while tourism-related spending and automobile sales remained weak. However, the outlook for tourism improved as year-end bookings surpassed expectations. Home sales for most District residential real estate markets were above low year-ago levels. New residential construction activity remained minimal and concentrated in lower price points. The District's office and industrial markets worsened as construction levels and rents declined and vacancy rates rose. However, several contacts indicated that commercial construction activity showed signs of bottoming out at low levels. Although overall manufacturing activity continued to decline, the decline moderated and more manufacturing contacts reported improved orders. Bank lending activity continued to be sluggish because of weak demand and tight credit standards. The pace of layoffs in the District slowed, and some businesses reported hiring temporary workers in response to an uptick in activity. Price pressures remained stable and most businesses had no plans of increasing prices in the near term.
Consumer Spending and Tourism
Tourism-related spending remained sluggish throughout the District. Industry contacts reported that hotel reservations, particularly related to conventions, were down and room rates continued to decline. Cruise ships remained fully booked because of deep discounts. The outlook for tourism was more optimistic with several reports indicating that year-end and early 2010 bookings were coming in above expectations.
Real Estate and Construction
Contractors commented on the difficulty in competing with bank-owned homes and lots that continued to enter the market. Realtors noted that the housing stimulus continued to drive sales at the low-end of the market, while sales at the high-end of the market remained weak. Several real estate contacts remarked that qualifying for loans remained challenging. The outlook over the next several months softened somewhat for homebuilders but improved notably among Realtors.
Commercial construction activity continued to decline, but several contractors noted that the amount of projects in development has improved modestly in recent months. Vacancy rates increased and contacts continued to report downward pressure on rents. Declines in net absorption began to abate across much of the District, however.
Manufacturing and Transportation
Banking and Finance
Employment and Prices
District contacts from a wide variety of industries continued to report stable prices relative to last year. Most businesses reported having little pricing power and felt that they would need to see a sustained increase in sales before raising prices.
Natural Resources and Agriculture
District growers enjoyed improved weather conditions through mid-November, which allowed them to resume normal fieldwork activities. Some Georgia growers were negatively affected by excessive rains.