Beige Book Report: Richmond
March 15, 1995
Overview
Economic activity in the Fifth District changed little in January
and February. Areas exhibiting little or no growth included
residential and commercial real estate and the service-producing
sector. Consumer spending and manufacturing activity were down
slightly. Activity at District ski resorts and ports was up,
however, and loan demand was stronger. Conditions in agriculture
continued to be better than a year ago.
Consumer Spending
Preliminary results from a mail survey of retailers indicated that
District retail activity decreased in February. Sales and employment
decreased, and shopper traffic and wages were unchanged. Inventories
were higher, and big-ticket sales rose slightly. Survey respondents
indicated that retail prices increased 0.8 percent in February. They
foresaw increased demand for their products and an increase of 1.5
percent in their prices during the next six months.
Service-Producing Firms
Preliminary results from a mail survey indicated that activity in
the service-producing sector changed little in February. Revenues
were unchanged; wages rose; and employment rose slightly. Service
producers indicated that prices rose 0.2 percent in February. They
expected increased demand for their services and an increase of 0.7
percent in their prices during the next six months.
Manufacturing
Most indicators of factory activity declined slightly in February
from their January levels, according to preliminary results of a
mail survey of District manufacturers. The shipments index changed
little and the new orders, backlog, and employment indexes declined
somewhat. Manufacturers expected shipments, employment, the
workweek, and wages to increase during the next six months. Finished
goods prices rose more slowly in February than in January, and at a
rate less than the general inflation rate. Raw materials prices rose
more in February than in January, and at a rate higher than the
general inflation rate. Respondents expected prices to rise less
during the next six months than they had in January.
Tourism
A telephone survey of hotels, motels, and resorts throughout the
District indicated that tourist activity in February was above that
of January and a year ago. The ski season got off to a slow start in
December and January because of a lack of snow, but activity at ski
resorts rebounded with colder weather and more snow in February.
Winter bookings at District hotels and motels were mixed compared to
a year ago. Contacts expected better-than-normal business and
moderate price increases over the next six months.
Ports
Representatives at District ports indicated that export and import
levels in January were higher than those in December and a year ago.
They attributed increased imports to strong economic growth
domestically and increased exports to strong economic growth abroad.
The port representatives expected that, during the next six months,
both exports and imports would increase at similar rates.
Finance
District financial institutions reported that loan demand picked up
during the last seven weeks. Demand for mortgage loans increased
sharply, that for commercial loans increased moderately, and that
for consumer loans remained steady. Interest rates were higher on
consumer and commercial loans, but were lower on mortgage loans.
Residential Real Estate
According to a telephone survey of District realtors and builders,
residential real estate activity was unchanged in late January and
February. Building permits, home sales, and housing starts were
stable over the period. Buyer traffic, however, increased. Home
prices were steady, except in North Carolina, where they decreased.
District building material prices and subcontractor wages were
unchanged.
Commercial Real Estate
District contacts reported that commercial real estate activity
changed little in late January and February compared to December.
Real estate contacts reported that construction activity increased,
especially that of build-to-suit office space around Washington,
D.C. Posted commercial rental rates were unchanged. Commercial
vacancy rates remained steady, except in North Carolina and West
Virginia, where they declined. Leasing agents reported that the
availability of prime office space tightened in most District
cities.
State Revenues
State government forecasters said that tax collections grew
moderately in January, and they expected similar rates of growth in
February. Real revenue growth remained strong in Maryland, North
Carolina, Virginia, and West Virginia; somewhat weak in South
Carolina; and flat in the District of Columbia.
Agriculture
Agricultural conditions in January and February remained better than
a year ago, according to District farm analysts. Warmer-than-normal
temperatures led to unusually high livestock survival rates and
small-grain crop development. Fruit trees budded prematurely,
however, increasing their vulnerability to a late freeze. Pastures
were in excellent condition, leading to earlier-than-normal cattle
grazing.