Beige Book: Housing, Auto Sales Spur Economy
According to the Federal Reserve’s recently released Beige Book, reports from the twelve districts indicated that economic activity expanded at a moderate pace during from late February to early April. Most districts noted increases in manufacturing activity, with particular strength seen in industries tied to residential construction and automobiles.
Manufacturing activity held steady or increased in most districts since the previous Beige Book. Strength in residential construction spurred manufacturing increases in several districts. There were widespread reports of growth in demand for wood products. The auto industry remained a source of strength for several districts. Gains were reported by food manufacturers in the Philadelphia and Dallas Districts, and food contacts in the St. Louis and Dallas districts plan to expand operations or make significant capital expenditures. In the Cleveland District, suppliers to the shale gas industry cited strong activity, and increased activity in natural-gas related industries was seen in the Chicago district. Electronic equipment and instruments manufacturers in the Philadelphia district and high tech firms in the Kansas City district noted gains, while reports on high tech orders in the Dallas district were mixed across customer groups and semiconductor firms in the Boston district said sales continued to languish.
Banking & Financial Services
Loan demand was steady to slightly up at most district banks that commented on lending. The Philadelphia district, however, said loan volumes softened somewhat since the previous report. The New York district noted widespread increases in loan demand, particularly for commercial loans and residential mortgages and the Cleveland district said business and consumer loan demand picked up since the last report. The Dallas district saw broad-based improvement in loan demand as energy-related lending remained strong and commercial real estate and home equity lending bounced up from low levels.
Several districts said loan pricing was very competitive. Most district banks said credit conditions remained favorable, with improved credit quality for business and consumer loans.
To read the Beige Book report click here.