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|Views from the Region
he Federal Reserve Bank of Atlanta periodically polls business representatives throughout the Southeast regarding their opinions on economic trends. Their observations are published in the Fed's Beigebook. In the Beigebook issued August 6, business representatives' comments suggested that the regional economic picture continues its moderate expansion. Here is a summary of their views.
- Most retailers reported that early summer sales exceeded last year's levels, although only slightly. Apparel sales remained strong, while reports on sales of home-related products were mixed.
- While sales were generally below merchants' expectations, inventories were close to target. The majority of retailers expected third-quarter sales to be up slightly compared with last year's.
- Overall, the single-family housing markets continue to show signs of slowing. The majority of contacts reported that home sales were up from a year ago, but a notable minority indicated sales were similar to last year. Builders in the District generally indicated that construction was down in June and that new home sales were mixed.
- Contacts reported that commercial real estate markets remain strong. Office markets continue to improve as vacancy rates drop, and construction remains brisk. Speculative office construction is under way in many markets.
- Industrial construction remains strong across most of the region. However, lack of suitable land is slowing development in several areas.
- The weakest segment of the commercial real estate market continues to be multifamily housing, with several areas showing some overbuilding, declining occupancy rates and increasing use of incentives to attract new renters.
Tourism and Business Travel
- Reports from factory contacts are mixed, with strength in some sectors offsetting weakness in others.
- Contacts report that the energy sector is posting especially strong growth. Shipbuilding is also strong. Some apparel manufacturers, however, report softness in the market for lightweight leisure wear, leading to further plant closings.
- Reports from the tourism and hospitality industry indicate further expansion with continued strength expected. Contacts indicate that the cruise industry out of Miami is doing well, and airline flights to Florida are operating at capacity.
- The luxury hotel segment continued to post strong growth in Atlanta, and hotels in Florida enjoyed high occupancy rates despite suspending normal off-season discounts.
Wages and Prices
- Bankers throughout the Southeast continue to report moderately strong loan demand with some signs of softening becoming apparent. Consumer and auto loan demand varies across lenders, and there are intermittent reports of declines in consumer loan quality.
- Mortgage loan demand remains relatively flat, while commercial loan demand continues to be strong.
The full text of the two most recent Beigebooks is available on the Internet by clicking here.
- With a few exceptions, contacts report that wage pressures are being held in check and prices remain stable. One industry contact noted that wage increases are being counteracted by capital investment and continuing gains in productivity.
- Wage increases have generally been required to attract and keep qualified employees in the high-tech sector. Contacts in several parts of the region also note that their competitive environment has left them unable to increase prices to match even moderate wage increases.