The latest Federal Reserve Beige Book report, a roundup of economic for all 12 U.S. regions for approximately six weeks leading up to May 24, finds an overall economy continuing to grow at a “modest to moderate pace.” And, like the recently released Credit Manager’s Index, a positive outlook seems to be more pervasive going forward.
The gains are led by the rebound in the manufacturing sector, which increased throughout most of the nation, save Philadelphia and Richmond. Manufacturing was also aided by a long-absent ally: suppliers of materials for residential construction. Firms within manufacturing appear to be mostly optimistic heading into the summer, certainly more so than in early 2013.
By sector and sub-sector tracking, the Fed reported notable gains in consumer spending, especially automotive and tourism; transportation, residential and commercial real estate as well as bank lending. On a district basis, the hottest performance this spring emanated from the Dallas region. The following are excerpts from the latest Fed Beige Book:
Consumer Spending and Tourism
“Most Districts noted that consumer spending increased during the reporting period, ranging from slight to moderate gains. Retail activity in the Boston, Philadelphia, and Dallas Districts was characterized as modest or moderate, while the Cleveland, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City and San Francisco Districts reported slight growth… Vehicle sales generally increased moderately across Districts. The New York, Richmond and San Francisco Districts reported that sales remained strong or at high levels.”
Real Estate and Construction
“Residential real estate and construction activity increased at a moderate to strong pace in all Districts. Several Districts reported that higher demand and low inventory of homes available for sale are resulting in multiple offers on properties. Almost all Districts reported higher home sale prices.”
Banking and Finance
“Credit quality improved, on balance. The New York and Cleveland Districts reported widespread decreases in delinquency rates for business and consumer loans. Several Districts reported that credit standards have not changed much since the previous report.”
Agriculture and Natural Resources
“Agricultural conditions remained mixed across Districts, as weather patterns varied. Recent rains brought drought relief to the Atlanta, Chicago, and Minneapolis Districts but delayed or slowed plantings in the Richmond, Atlanta, Chicago, St. Louis, Minneapolis and Kansas City Districts.”
-Brian Shappell, CBA, CICP, NACM staff writer