Latest Fed `Beige Book’ shows continued slow growth, modest optimism about region’s economy
Slow job growth continues across the New England region, the Federal Reserve said Wednesday, with manufacturing and retail sectors reporting gains in sales or revenue, consulting and advertising firms “generally upbeat,” and increasing demand for residential real estate.
The report, known as the “Beige Book,” is issued eight times a year and uses anecdotal information from interviews with businesses to analyze the economic climate in 12 Federal Reserve districts.
In the New England district, some businesses expressed concern that the presidential election, domestic politics and the potential expiration of some tax benefits in January would slow hiring as well as demand, particularly in the commercial real estate sector.
Leasing activity in the Boston area was down, the report said, largely due to political uncertainty. Meanwhile, sales of single-family homes and condominiums continued to improve despite a slight decline in median sales prices. Properties in “move-in” condition were in the greatest demand, the report said, noting that such properties are receiving multiple bids, sometimes above the seller’s asking price. Low interest rates and the increasingly high cost of renting contributed to the overall uptick in sales.
Retailers said that while furniture sales picked up after declining this summer and spending on apparel and household items remains strong, they largely expected the nation’s economy to remain flat over the next 6 to 8 months and were “cautiously optimistic” that their 2012 revenues will end up slightly ahead of 2011.
A pick-up in domestic and international business travel has benefited Boston and 2012 is expected to be the industry’s best since 1999-2000.
In the manufacturing sector, the report found companies were “somewhat tentative,” which it attributed to the fact that many are engaged in annual planning cycles for 2013. Officials at one regional pharmaceutical firm said they planned to hire 1,000 people over the next year, mostly in sales and marketing. (The Beige Book does not identify businesses by name.) Meanwhile, other companies said they were “re-evaluating their benefits structures as a way to conserve cash,” according to the report.
An unprecedented number of mergers and acquisitions in the health care industry have caused demand for medical consulting services to skyrocket, the report said. And while health care companies and other firms cited worries about an economic slowdown, none said they anticipate another recession and their overall tone was described as “cautiously optimistic.”Megan Woolhouse can be reached at firstname.lastname@example.org.