by Lance Turner
Posted 12/4/2013 02:47 pm
Updated 11 months ago
Economic activity in the Federal Reserve's Eighth District, which includes Arkansas, "expanded at a moderate pace" since October with "positive" activity in manufacturing, retail and auto sales, according to the Fed's "Beige Book" report, released Wednesday.
The Beige Book survey, conducted eight times a year by the central bank, is based on anecdotal reports from businesses and will be considered along with other data when the Fed meets next on Dec. 17-18.
The survey examines business conditions in each of its 12 districts. Arkansas is in the Fed's Eighth District, which is headquartered in St. Louis and also includes parts of Missouri, Illinois, Indiana, Kentucky, Tennessee and Mississippi.
Overall, the Fed found that the U.S. economy held steady during the 16-day partial government shutdown, growing moderately in most regions from October through late November.
The Fed said seven districts described growth as moderate. Four — Philadelphia, Chicago, Kansas City and San Francisco — said growth was modest. Boston said its regional economy continued to expand.
"Business activity in the Eighth District has expanded at a moderate pace since the previous report," the Fed report said. "Recent reports of planned activity in manufacturing and services have been positive. Reports of retail and auto sales have also been positive. Overall residential real estate market conditions in the District have continued to improve; commercial and industrial real estate markets have also improved in some areas of the District."
The report also said that lending activity at sample of banks in the district "was little changed" during the third quarter. Prices, wages and employment levels also stayed the same or increased, the Fed said.
The Fed report looks at various sectors of the economy. Among them:
Banking and Finance - Banks in the district described "little change" in lending activity during the third quarter. Credit standards and credit worthiness of applicants for prime residential mortgage loans remained mostly unchanged; but demand was moderately weaker overall, with some respondents reporting substantial weakness.
Real Estate and Construction - The report said home sales continued to increase year-over-year throughout most of the district. Compared with last year, October year-to-date home sales were up 17 percent in Louisville, 20 percent in Little Rock, 9 percent in Memphis, and 7 percent in St. Louis.
While the industrial real estate market was on the mend in some areas of the district, one Little Rock contact called the industrial market here as a "sleepy sector." Contacts in Memphis, Louisville, Ky., and St. Louis described improving industrial real estate conditions.
Consumer Spending - Retail sales in September and October were up on average compared with the same time last year. Two-thirds of survey contacts reported sales increases; one-third reported sales decreases.
Meanwhile, new store openings and renovations outnumbered store closings during the quarter. Most contacts expected holiday sales to increase compared with last year, and many had hired more seasonal employees than last year.
Reports from auto dealers were "generally positive," the report said, with sales increases from the same time last year. Most said inventories were at desired levels. Forty-two percent of contacts reported increases in high-end vehicle sales; 17 percent reported increases in low-end vehicle sales.
Agriculture and Natural Resources - As of mid-November, the report said, more than 90 percent of the district's corn, sorghum and rice crops had been harvested. Harvest of cotton and soybean crops was 81 and 89 percent complete, respectively.