Reports from the 12 Federal Reserve Districts indicated that economic activity is generally continuing to expand, though a few bank districts indicated some deceleration, according to the Federal Reserve's Beige Book, which comments received from businesses and other contacts.
Some slowing in the pace of growth was noted in the New York, Philadelphia, Atlanta and Chicago districts. In contrast, Dallas characterized that region's economy as accelerating. Other districts indicated that growth continued at a steady pace.
Commercial and industrial real estate markets were generally reported to be steady, though there were scattered signs of a pickup. Commercial leasing markets showed modest signs of improvement in the Richmond and San Francisco districts. Boston and Dallas noted some firming in property sales markets; Kansas City reported declines in prices for office buildings.
Non-residential construction, though widely reported to be at very low levels, reportedly rose modestly in the Boston, Chicago, Minneapolis and Dallas districts. The Chicago district respondents noted that public sector projects are becoming smaller. Cleveland observed a pickup in industrial and high-end commercial development but a pullback in health care-related projects. Richmond reported some pockets of strength in the retail market. More broadly, contacts in a number of districts expressed a general sense of optimism about the outlook for the second half of 2011.
Residential construction and real estate continued to show widespread weakness, except in the rental segment, where market conditions have strengthened and construction activity and development have picked up.
Most districts indicated that home prices continued to decline: Boston, Philadelphia, Richmond, Atlanta, Kansas City and San Francisco all reported some downward drift in selling prices. Reports from the New York and Cleveland districts indicated that prices have been steady on balance. No district indicated a general increase in home prices.
Residential sales activity, though widely reported to be at low levels, picked up somewhat in the Philadelphia, Atlanta, Chicago and Kansas City districts. Dallas indicated that improved traffic has raised prospects of improved sales in the second half of 2011 and Boston observed signs that the market is stabilizing. Sales activity was characterized as mostly steady in the New York, Cleveland, Dallas and San Francisco districts, but declining in the St. Louis and Minneapolis districts.
Those districts reporting on the residential rental market - specifically, New York, Atlanta, Chicago, Minneapolis, Dallas and San Francisco - all indicate that conditions have strengthened.
In terms of residential construction, activity has remained generally depressed, with a number of districts reporting a large overhang of distressed properties. However, a number of districts - New York, Cleveland, Atlanta, Chicago and San Francisco - report improved prospects for development of multifamily rental properties.
Most districts described loan demand as mixed or slightly improved. Contacts in the Philadelphia, Cleveland, Richmond, Atlanta, Chicago, Dallas and San Francisco districts noted a modest uptick in business loan demand. The increase in business loan demand in Cleveland was described as broad-based, including a pickup in construction loan requests for multifamily dwellings. Boston noted an improved lending environment for
commercial real estate and demand for commercial mortgages increased in New York and Dallas. Commercial and industrial loan activity increased in Richmond, Chicago, St. Louis, Dallas and San Francisco, held steady in New York and decreased in Kansas City.
Outside of banking, Chicago and San Francisco indicated increased investment activity by hedge funds, venture capital firms and other forms of private equity.
Credit standards were reported to be mixed but, on balance, a bit easier in recent weeks. A number of districts noted improvements in overall credit quality: specifically, Philadelphia, Cleveland, Richmond, Kansas City, Dallas and San Francisco. New York indicated rising delinquency rates on consumer loans but declining rates on commercial loans and mortgages.
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