Beige Book: Economic Activity Expands Across Most Regions
According to the latest Fed Beige Book, reports from the twelve Federal Reserve Districts indicate that economic activity continued to expand across most regions and sectors from early January through mid-February.
The following highlights were excerpted from the report:
Manufacturing and Other Business Activity
Manufacturing generally increased since the previous survey, although the rate of growth varied across the Districts and sectors. The Atlanta District noted that manufacturing rebounded during the current reporting period following a modest slowdown in December. According to contacts in the Chicago and San Francisco manufacturing rose moderately, while contacts in New York noted modest gains. Contacts in Kansas City indicated slow growth, contacts in Philadelphia reported slight increases, and contacts in Dallas noted flat to positive growth. Reports from factory contacts in Cleveland District were mixed, while contacts in Richmond noted that activity weakened. Manufacturers had generally positive outlooks going forward. Firms in Atlanta expect production levels to increase over the next three to six months, some firms in Chicago expect steady growth in shipments for 2015. Manufacturers in Boston, Cleveland, and Richmond reported positive outlooks. In contrast, New York District contacts have grown less optimistic about the near-term outlook.
Banking and Finance
Reports on banking conditions were mostly positive across the Districts. Overall loan demand increased in all reporting Districts, with the exception of Kansas City, where loan demand was mixed. Reports on the pace of increase varied from slight in Richmond and Dallas to strong in Atlanta and New York. Commercial real estate loan demand was strong in Philadelphia and Cleveland. Commercial loan demand increased in New York, was particularly strong in Cleveland and Atlanta, was steady in Kansas City, and was mixed in Richmond. Residential lending was positive at all reporting banks, with bankers in Cleveland, Richmond, Chicago, and San Francisco noting an increase in refinancing activity.
Reports across the Districts indicated that credit quality has remained largely unchanged or has improved since the prior reporting period. Bankers in most Districts reported no change in their own lending standards. However, several bankers in the Richmond and St. Louis Districts reported relaxed standards. Bankers in the Philadelphia, Richmond, and San Francisco Districts noted that competition is lowering lending standards more generally.
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