First District - Boston
continues to do well in the first district, with pharmaceuticals and
semi-conductor industry contacts reporting positive news. However, those
in the auto parts-manufacturing game note they are having problems
keeping up with increase demand, perhaps partially affected by the Japan
situation. Commodity price increases also are of growing concern.
Commercial real estate is seeing less of a fall-off than in past months,
but job growth stagnation is holding the sector and rent prices back,
Fed contacts reported.
Second District - New York
Confidence in most
industries appeared to be mixed in the second district. The pace of
economic growth there, despite not being robust in the first place, has
diminished somewhat. Commercial real estate appeared to enter a level,
steady period. There did appear to be an uptick in commercial loan
demand, and tightening standards for such loans have returned.
Third District - Philadelphia
manufacturing growth from earlier in the spring has given way to a more
tepid expansion rate as summer months approached. Less than one-third of
manufacturers experienced an increase in shipments and orders in May -
It exceeded 50% as recently as early April. Business loan demand has
been mixed, though Fed contacts have characterized general activity on
the part of small and medium-sized businesses as "weak." Commercial real
estate has changed little, though the "Class A" office building
category experienced some newfound demand.
Fourth District - Cleveland
manufacturers, unlike some, have retained a mostly optimistic outlook,
largely because its key industries have garnered solid foreign demand.
Auto production in the Midwest has grinded to a halt virtually, however,
because of the Japanese supply-line disruptions. Prices for other
materials also have risen noticeably, a trend not expected to reverse in
the very near-term. Business loan demand grew modestly in a diverse
range of industries, Fed contacts there noted.
Fifth District - Richmond
seven-month expansion saw cooling this month, with those in steel and
textiles facing particular volatility. Commercial borrowing gains were
moderate but "broad-based" across many industries, with capital
equipment expenditures showing solid gains. Most orders, however, came
from larger manufacturers. Commercial real estate was mixed among
sub-markets. Washington, DC and Baltimore seem to still be in the
"spotty area" as far as pricing and demand for offices goes; but there
was positive news in parts of West Virginia and the Hampton Roads, VA
area. The local agriculture industry has been hit hard by poor weather
conditions in the southern portion of the region, with corn and soybean
plantings being affected harshly.
Sixth District - Atlanta
Commercial real estate
remained at low levels in recent weeks and months in what has long been
considered a bloated, overdeveloped market. Businesses outside of
construction/real estate reported improvements in the area of credit
availability, though capital requirements are being weighed heavily by
some lenders. Manufacturing saw some increases, and Mississippi River
flooding is not expected to cause long-term disruptions. The Japan
situation, however, is expected to do so. Abnormally cold and wet
weather stung Ag-based businesses throughout the district, though
pricing remained very strong for those whose products endured.
Seventh District - Chicago
had boomed in the district as much as any other throughout 2011, slowed
since early spring. It is expected/hoped to be a short-term phenomenon.
Supply line disruptions also are an issue here. Auto-related businesses
have tried to increase inventories quickly in an attempt to combat
future shortages. However, manufacturers of heavy truck, agricultural
and construction equipment saw an uptick, Fed contacts noted. Commercial
real estate conditions have changed little, with rents remaining low to
maintain occupancy levels. Business spending has increased steadily.
Bad weather was a story for the Ag industry in district eight, too.
Eighth District - St. Louis
continued to expand with plant opening/expansion still in place. Tire,
food, paper, packaging and machinery performed particularly well as did
automotive, though uncertainty dogs the industry post Japanese disaster.
As per usual, commercial real estate performances in vacancy rates
varied greatly depending on the city. Credit standards for business
loans have changed little and demand, if changed at all, leaned toward a
decline. Ag production was stymied drastically by heavy rain and
flooding this spring.
Ninth District - Minneapolis
estate has improved in the region, with vacancy rates down in key
markets such as Minneapolis-St. Paul. Manufacturing was up generally,
with electronics and aerospace producers leading the way. Like other
district, Ag producers struggled amid poor weather. The district is a
bit more optimistic than others in part because its job market, on the
whole, has demonstrated moderate improvement.
Tenth District - Kansas City
slowed on the whole, though factories continued the pace of hiring on
high hopes for the summer. High-tech service firms appeared to perform
especially well of late. Commercial real estate was mostly flat though
much better than spring 2010. Demand for business loans and credit
standards have changed little in recent weeks, Fed contacts noted. Ag
producers in the district enjoyed higher prices on elevated export
demand from China, among others.
Eleventh District - Dallas
situation showed a noticeable increase, but it's been difficult to
determine whether it's coming from seasonal demand or actually business
condition improvements, the Fed noted. The high-tech manufacturing
sector, booming of late in the district, continued to do strong sales
and orders; but uncertainty is an issue because of a shortage in
Japanese-produced components they need. Commercial loan demand, even in
real estate, has improved among large banks. Weather was a problem for
Ag producers in the district though, unlike its counterparts, the issue
is a lack of precipitation. Both wheat and cotton are expected to do
poorly this year.
Twelfth District - San Francisco
posted gains and demonstrated little negative impact stemming from the
Japan situation. Semiconductors and technological-based production
continues to be the leader in the district. Ag product sales were
"robust" though supply constraints could have an impact in the near
future. Businesses seem slightly looser about increasing capital
spending. However, lending standards remain restrictive here, even in
the face of improving overall credit quality for businesses.