Posted July 28, 2010
Beige Book: modest economic activity
Economic activity has continued to increase, but at a more moderate pace, according to the latest Federal Reserve Beige Book report issued today.
The Cleveland and Kansas City districts reported that the level of economic activity generally held steady. Among those districts reporting improvements in economic activity, a number of them noted that the increases were modest, and two districts, Atlanta and Chicago, said that the pace of economic activity had slowed recently.
Manufacturing activity in most districts continued to move up since the last report, although the pace of activity slowed or activity leveled off in the New York, Cleveland, Kansas City, Chicago, Atlanta, and Richmond districts. Automobile manufacturing was a bright spot for the Cleveland, Chicago, and St. Louis Districts. Automobile parts suppliers also experienced increased demand in both the Richmond and Chicago districts.
Firms in the semiconductor manufacturing industry reported relatively strong sales or demand growth in both the Boston and San Francisco districts. Firms in aircraft and parts manufacturing saw sales pick up in both the San Francisco and Dallas districts.
Manufacturing firms in the Boston, Philadelphia, Kansas City, and Dallas districts were optimistic that demand would continue to improve in the following months. However, Cleveland's contacts expect demand growth to taper off, Philadelphia noted that the balance of positive over negative views had narrowed, and Atlanta reported fewer firms planning expansions in production. Richmond, Chicago, and Dallas reported that firms in construction-related manufacturing experienced weak demand; construction supplies sales were flat in Kansas City, and Minneapolis reported that a firm in the sector was increasing production.
Steel production declined in both the Chicago and Cleveland districts. Some manufacturers in the Atlanta and San Francisco Districts reported high excess production capacity. Capacity utilization was below pre-recession levels in Cleveland and edged lower among steel producers in Chicago.
