There really isn’t much to cause concern for the primary markets of the electrical industry, and plenty of cause for continued optimism, in the Federal Reserve’s latest Beige Book report, a compendium of anecdotal reports on current economic conditions from the Fed’s 12 regional banks. The Fed banks prepare the Beige Book to provide background for the Federal Reserve Open Market Committee meetings in which monetary policy is set. The excerpts below are edited down from the Beige Book summary.
Residential real estate. Real estate activity increased at a moderate to strong pace in most districts and most reported an increase in home sales. Home prices increased throughout the majority of the reporting districts. Boston, New York, Richmond, Atlanta, Minneapolis, Kansas City and Dallas noted low or declining home inventories and upward pressures on home prices in some areas. Residential construction activity also improved moderately across the districts, and contacts in New York, Philadelphia, Chicago, Minneapolis, Dallas, and San Francisco reported faster growth in multi-family construction, in particular.
Commercial real estate. Commercial real estate market conditions likewise continued to improve across most districts and non-residential construction activity as a whole was stable to increased throughout the nation. New York, Philadelphia, Cleveland, Atlanta, Chicago, St. Louis, Minneapolis, and San Francisco reported modest to moderate improvements in nonresidential real estate activity. Dallas reported strong growth in leasing activity for office and industrial space.
Manufacturing. Manufacturing increased in most districts since the previous survey. The exception was Kansas City, which noted a slight contraction, with storms retarding some activity. Most districts reported stable or increasing new orders, shipments, and production. Firms in the Boston, Philadelphia, and San Francisco districts were broadly optimistic about prospects for the second half of 2013, while manufacturers in the Richmond district were cautiously optimistic; contacts expressed mixed outlooks in the Dallas district, and contacts in the Cleveland and Atlanta district do not expect future production to be as high as previously projected.
Strong demand in residential construction continued to stimulate the manufacturing sector in several districts. Home-building suppliers in the Philadelphia and Cleveland districts reported strong activity. Wood product manufacturers expanded operations and increased production in the St. Louis and San Francisco districts. A cement producer in the Dallas district saw a very strong market. Demand for construction equipment picked up in the Chicago district.
Automobile manufacturing in the Chicago, St. Louis and Minneapolis districts; steel and metal production in Philadelphia, Chicago, Minneapolis, Dallas, and San Francisco; and fabricated metal manufacturers in the Philadelphia and Dallas all reported gains. Gains were also seen by petroleum refining manufacturers in the St. Louis and Dallas districts. The San Francisco district said semiconductor sales increased substantially.