Beige Book Report: Richmond
November 1, 1995
Overview
Indicators of Fifth District economic expansion changed little on
net since the last Beige Book. Growth increased in manufacturing but
decreased in service production and state revenues. Employment
agencies saw stronger demand for temporary workers, and tourism
industry sources reported that business was down from August.
Retail, real estate, port, and agriculture contacts reported that
activity was mixed in their industries, while financial industry
sources saw little change in lending activity.
Retail Trade
Indicators of retail activity growth were mixed in September,
according to results from a mail survey of District retailers. Sales
revenue, employment, and wage growth slowed. Inventory, big-ticket
sales, and shopper traffic growth increased. Survey respondents
indicated that retail prices rose more slowly in September than in
August. They expected their prices to rise more slowly during the
next six months than they had expected in August.
Service Production
Service-sector growth slowed in September from August, according to
results from a District mail survey. Revenue, employment, and wage
growth declined. Service producers reported that prices rose more
slowly in September. They expected their prices to rise during the
next six months at the same rate as they had expected in August.
Manufacturing
Indicators of factory growth increased in September from their
August levels, according to results from a mail survey of Fifth
District manufacturers. Survey respondents reported that growth in
shipments, new orders, and backlogs increased; workweek and
employment growth changed little. Manufacturers indicated that
finished goods prices rose faster in September than in August and
that raw materials prices rose at about the same rate; both grew at
rates below the general inflation rate. Respondents expected their
prices to rise slightly less during the next six months than they
had expected in August.
Tourism
A telephone survey of hotels, motels, and resorts throughout the
District indicated that tourist activity in September and early
October was below that of August and a year ago. Contacts suggested
that the threat of storms had kept tourists away from coastal areas.
Fall bookings were up compared to a year ago, and contacts expected
better-than-normal business and some price increases during the next
six months.
Port Activity
Representatives at District ports reported that export levels in
September were higher than those in August and a year ago, while
import levels were lower. Contacts expected exports and imports to
increase during the next six months.
Temporary Employment
A telephone survey of Fifth District temporary employment agencies
indicated that the demand for temporary workers was higher in
September and early October than in August or a year ago. One
contact said, "There are more jobs than there are people to fill
them." Contacts expected demand during the next six months to be
greater than usual. Temporary workers' wages rose faster than the
general price level during the past year, although most contacts
continued to expect wages to stabilize during the next six months.
Finance
District financial institutions reported in a telephone survey that
credit market activity changed little. Demand was nearly unchanged
for commercial, consumer, and mortgage loans. Interest rates fell
slightly for all three loan categories.
Residential Real Estate
According to a telephone survey of District real estate agents and
homebuilders, residential real estate activity was down in September
and early October. Housing sales changed little; starts, permits,
and buyer traffic were down, however. Wages and building material
prices rose during the period, although one contact in West Virginia
said a sluggish market there was leading to falling wages.
Commercial Real Estate
District contacts reported in a telephone survey that commercial
real estate activity increased in September and early October.
Leasing activity and commercial rents rose, and vacancy rates
declined. The availability of prime office space continued to
tighten in most of the District, and several contacts reported
shortages, especially in the Carolinas and Virginia. Contacts
reported an increase in new construction.
State Revenues
In a mail survey, state government contacts indicated experiencing
slower tax revenue growth in September. Compared with August, real
revenue growth was slower in South Carolina and Virginia; the same
in the District of Columbia, Maryland, and North Carolina; and
higher in West Virginia.
Agriculture
District agricultural conditions were mixed in recent weeks,
according to agricultural analysts surveyed by telephone. Moderate-
to-heavy rainfall from Hurricane Opal fell across most of the
District; this rain harmed unharvested cotton and soybean crops but
benefited recently planted small-grain and late vegetable crops. The
rainfall also improved pasture and hay conditions. Fall harvesting
was delayed by the weather but was ahead of its normal pace at the
time of the survey.