Fed paints gloomy picture of New England economy
The New England economy remains "mixed" but by some indicators is "generally softening," the Federal Reserve Bank wrote in Wednesday's edition of its Beige Book, a summary of nationwide economic activity.
The sector-by-sector review found a little reason for optimism in residential real estate but little other good news.
In residential real estate, "contacts in Massachusetts continue to report increased activity at open houses, and April's pending home sales numbers in the Boston area are said to look promising. However, one contact notes that financing issues could still prevent increased activity from translating into increased sales," the report states.
Commercial real estate contacts report that the Boston office building market, "dormant" during the first quarter, "has seen a number of properties come up for sale in recent weeks." But transactions are not increasing significantly, the authors added.
Commerical real estate deals are being financed by life insurance companies and commercial banks, not by Wall Street investment banks, they said.
Commercial leasing activity, the report stats, has slowed in recent weeks.
The authors appeared surprised in noting that despite problems in commercial real estate, layoffs have been "minimal."
The retail outlook appears especially grim.
"Retailers say they see clear evidence that consumers are scaling back their spending, and the majority of respondents complain that the media's "doom and gloom" portrayal of the economy contributes to such cutbacks," the report states. Nevertheless, capital spending remains on pace.
Many retailers "expect conditions to improve by early to mid-2009," the report states.
Manufacturing, the report states, shows continued "deteriorating" conditions.
"Contacts say that demand has started to weaken for nonresidential building equipment and for non-automotive transportation equipment and services," the report states.
"Contacts from various industries report that overseas markets remain relatively strong, although some say their Western European sales have been sluggish in recent months," it adds.
Materials costs have been especially tough on manufacturers, the report states, while "average pay increases (in manufacturing) are in the range of 3 percent to 4 percent."
Software companies reported some slowness in domestic licensing revenue.
"All (software) contacted firms have raised pay, generally around 4 percent. The majority of New England software and information technology respondents are projecting revenues to continue growing at current rates."
A staffing executive said companies increasingly are holding out for "A" candidates rather than settling for "B" candidates.
Source: Boston Business Journal
The sector-by-sector review found a little reason for optimism in residential real estate but little other good news.
In residential real estate, "contacts in Massachusetts continue to report increased activity at open houses, and April's pending home sales numbers in the Boston area are said to look promising. However, one contact notes that financing issues could still prevent increased activity from translating into increased sales," the report states.
Commercial real estate contacts report that the Boston office building market, "dormant" during the first quarter, "has seen a number of properties come up for sale in recent weeks." But transactions are not increasing significantly, the authors added.
Commerical real estate deals are being financed by life insurance companies and commercial banks, not by Wall Street investment banks, they said.
Commercial leasing activity, the report stats, has slowed in recent weeks.
The authors appeared surprised in noting that despite problems in commercial real estate, layoffs have been "minimal."
The retail outlook appears especially grim.
"Retailers say they see clear evidence that consumers are scaling back their spending, and the majority of respondents complain that the media's "doom and gloom" portrayal of the economy contributes to such cutbacks," the report states. Nevertheless, capital spending remains on pace.
Many retailers "expect conditions to improve by early to mid-2009," the report states.
Manufacturing, the report states, shows continued "deteriorating" conditions.
"Contacts say that demand has started to weaken for nonresidential building equipment and for non-automotive transportation equipment and services," the report states.
"Contacts from various industries report that overseas markets remain relatively strong, although some say their Western European sales have been sluggish in recent months," it adds.
Materials costs have been especially tough on manufacturers, the report states, while "average pay increases (in manufacturing) are in the range of 3 percent to 4 percent."
Software companies reported some slowness in domestic licensing revenue.
"All (software) contacted firms have raised pay, generally around 4 percent. The majority of New England software and information technology respondents are projecting revenues to continue growing at current rates."
A staffing executive said companies increasingly are holding out for "A" candidates rather than settling for "B" candidates.
Source: Boston Business Journal
Labels: Economy
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