September 23, 1992
Overview
There were some signs of improvement in District business conditions
over the past six to eight weeks. Retail sales and traffic were up,
as were retail prices and wages. Manufacturing showed moderate
improvement. Both retailers and manufacturers remained optimistic
about the next six months. Residential real estate sales increased,
while prices in that sector were holding steady. At District ports,
imports were higher and exports steady over the previous month.
Financial institution activity changed little, while tourism
declined. Agriculture was generally in good shape, though heavy
rains and cool temperatures were slowing crop development in some
areas.
Consumer Spending
Our regular mail survey indicated that District retail activity
improved in recent weeks. Sales and shopper traffic apparently
increased, as did wholesale and retail prices. Retailers reported
higher employee wages but steady employment.
Survey respondents were relatively optimistic about their prospects for the next six months. They anticipated increases in sales and in wholesale and retail prices. A large majority, however, expected no change in employment.
Manufacturing
Manufacturers indicated that District factory activity improved
somewhat in past weeks. Respondents reported increases in shipments,
new orders, exports, and raw materials prices and noted little
change in other indicators. Government regulations and red tape, and
also excess capacity, continued to be major problems for many
manufacturers.
Manufacturers were fairly optimistic about the next six months. They expected increases in most indicators, including employment, and suggested that finished goods inventories would fall.
Ports
Representatives at District ports--Baltimore, Charleston, and
Hampton Roads (Norfolk)--indicated that imports were generally
higher in August compared with July, while exports remained about
the same. Compared with a year ago, both imports and exports were
generally higher. Export activity was expected to increase at the
Port of Baltimore but to remain the same at the Ports of Charleston
and Hampton Roads during the next six months.
Tourism
Hotels, motels, and resorts throughout the District indicated that
tourist activity for August and early September declined from July
and from a year ago. Most respondents attributed the decreases to
the weather, the economy, and a Labor Day weekend that fell later
than normal in the season. Respondents who reported increases
attributed them to a pickup in convention bookings. About half of
the respondents reported that fall bookings were slightly above last
year's while the other half reported little change. Over half
expected tourist activity to remain about the same throughout the
fall.
Finance
District financial institutions contacted by telephone indicated
that credit conditions were little changed over the last six weeks.
Respondents stated that commercial loan demand weakened slightly.
Consumer loan demand was said to be steady. Banks noted that loan
rates fell for commercial, consumer, and mortgage loans. Respondents
reported that demand in the mortgage sector picked up, but that the
bulk of the activity involved the refinancing of home mortgages.
Residential Real Estate
Real estate agents contacted by telephone indicated that residential
activity improved somewhat in much of the District over the past six
weeks, but remained sluggish in some areas. Sales, on net, were up,
while home prices were little changed. Many respondents suggested
that sales of new homes were stronger than sales of existing homes,
though respondents in the Baltimore area indicated otherwise.
Several respondents noted that activity was strongest for homes in
the middle to low price range. Meanwhile, those in some areas
suggested that demand for upscale homes, although still the weakest
market, was beginning to increase.
Agriculture
Our contacts reported that District farm conditions were generally
favorable in most areas. Fall harvesting activity was underway with
normal progress in all areas except parts of South Carolina and Vest
Virginia where heavy rains from Hurricane Andrew had delayed
activity. Crops were reported to be in generally good condition, but
crop development was termed slower than normal in Maryland and West
Virginia because of unseasonably cool temperatures. Also in West
Virginia, moisture-related disease reportedly damaged some crops.