May 10, 1995
Overview
Economic activity in the Fifth District increased slightly in March
and April. Areas reporting growth included tourism, ports, temporary
employment agencies, commercial real estate, and state revenues.
Areas exhibiting little or no growth included services, finance, and
residential real estate. Growth in consumer spending and
manufacturing activity was down, and conditions in agriculture were
somewhat worse than a year ago.
Consumer Spending
Indicators of retail activity growth generally decreased in April
from their March levels, according to preliminary results from a
mail survey of District retailers. Sales, wages, and inventories
decreased. Employment and big-ticket sales increased, however, and
shopper traffic was unchanged. Survey respondents indicated that
retail prices rose 1.1 percent in April. They foresaw decreased
demand for their products and an increase of 2.0 percent in their
prices during the next six months.
Service-Producing Firms
Indicators of service-sector activity growth changed little in April
from their March levels, according to preliminary results from a
District mail survey. Respondents indicated, however, that
employment was lower. Service producers reported that prices rose
0.6 percent in April. They expected a slight decrease in demand for
their services and an increase of 1.0 percent in their prices during
the next six months.
Manufacturing
Most indicators of factory activity growth declined in April from
their March levels, according to preliminary results of a mail
survey of District manufacturers. The shipments, new orders, and
employment indexes declined, and the backlog and workweek indexes
changed little. Manufacturers expected shipments, the workweek, and
capital expenditures to increase during the next six months.
Finished goods prices rose at the same rate in April as in March,
and at a rate slightly below the general inflation rate. Raw
materials prices rose less in April than in March, and at a rate
higher than the general inflation rate. Respondents expected prices
to rise slightly faster during the next six months than they had
expected in January.
Tourism
A telephone survey of hotels, motels, and resorts throughout the
District indicated that tourist activity in April was above that of
March and a year ago. Spring bookings at District hotels and motels
were up compared to a year ago. Contacts expected better-than-normal
business this summer; one predicted "our biggest summer ever."
Ports
Representatives at District ports indicated that export and import
levels in March were higher than those in February and a year ago.
They expected that, over the next six months, exports would increase
and imports would change little. One contact attributed this outlook
to the weak U.S. dollar.
Temporary Employment Agencies
A telephone survey of temporary employment agencies indicated that
labor markets were tight throughout the District. Demand for
temporary workers strengthened and wages rose somewhat in April
compared to March and a year ago. One contact suggested that there
were "more jobs than people right now," and another described "a
bidding war" for workers. Demand was particularly strong from
manufacturers, warehousers, and distributors, and companies were
seeking "anyone with computer skills."
Finance
District financial institutions reported that credit conditions were
mixed during the past seven weeks. Interest rates rose moderately
for consumer loans, fell for mortgage loans, and were flat for
commercial loans. Demand for mortgage loans increased sharply;
demand for commercial loans rose slightly; and demand for consumer
loans declined.
Residential Real Estate
According to a telephone survey of District realtors and builders,
residential real estate activity was unchanged in March and April.
Building permits, home sales, and buyer traffic were stable over the
period. Housing starts were also stable, except in West Virginia,
where they decreased. Contacts reported that lower- to middle-priced
homes were selling better than expensive homes. Home prices were
steady, although building materials prices rose.
Commercial Real Estate
District contacts reported that commercial real estate activity
increased slightly in late March and April. Leasing activity
increased somewhat, but contacts reported little new construction.
Vacancy rates inched downward, except in Maryland and the District
of Columbia, where they were stable. Commercial rents changed
little, except in North Carolina and the District of Columbia
suburbs, where they increased. The availability of prime office
space tightened in most District cities, and contacts reported
shortages of such space in Raleigh, N.C., and the District of
Columbia.
State Revenues
State government forecasters said that tax collections grew in
March. Real revenue growth was strong in Maryland, North Carolina,
South Carolina, and Virginia; somewhat slower in West Virginia; and
flat in the District of Columbia.
Agriculture
Agricultural conditions in April were somewhat worse than a year
ago, according to farm analysts. Despite some recent rainfall, soil
moisture levels in most District states were well below normal.
Winter small-grain crops remained in generally good condition, but
damage from dry weather was apparent in some areas of the District.
Spring planting activity generally progressed at a normal pace,
although in some areas of Virginia, farmers were waiting for rain
before resuming planting. Dry conditions contributed to forest fires
in Virginia and West Virginia.