Beige Book provides upbeat report on housing sector
The Federal Reserve’s latest Beige Book report, which covered the period February 18 – April 2, 2012, was not effusive in its assessment of economic activity, pegging expansion at a “modest to moderate pace.” But a closer look at the report, provided by IHS Global Insight, indicate an uptick in housing demand, residential construction activity, consumer spending, employment and lending. The only dark cloud on the horizon, according to the Federal Reserve’s economic analysis, is gas prices.
The housing market: Unusually warm weather has resulted in improved housing demand in most U.S. districts. Building permits and multifamily housing starts expanded, while home prices were generally down or steady from the last reporting period. Non-residential construction activity showed slight improvement, and builders in five of the 12 districts were optimistic in their outlook for the sector.
• Consumer spending: Upbeat across the board, except for worries about rising fuel costs. People are still buying cars and going on vacations in healthy numbers.
• Employment: Hiring activity improved in most reporting districts, especially in manufacturing, professional services, and IT. Employers in five districts reported difficulty in attracting highly-skilled labor, particularly in the manufacturing sector. Employers in New York are likely to increase payrolls in the coming months.
• Manufacturing: Improved activity in most districts, particularly in the automotive and high-tech industries. Slowing economic activity in Europe and the higher costs of raw materials (especially petroleum) are a concern. Transportation costs are also rising in some districts, and some had difficulty passing these costs on to consumers.
• Lending: The demand for lending improved in the majority of districts, while credit conditions held steady. Real estate lending activity expanded in some districts.
According to the IHS Global outlook, the most recent Beige Book report brought further evidence that “the downtrodden housing market could be on the cusp of a demand-driven recovery.”
Although rising fuel costs were frequently cited by business as a worrisome trend, the warmest March on record (according to the National Oceanic and Atmospheric Administration) boosted manufacturing, construction, and retail sales across most districts. Unless economic conditions worsen considerably, the Fed has indicated that it is less likely to pursue any more quantitative easing (QE), IHS Global noted.
Lowe’s marks anniversary of Sanford destruction
Marking the one-year anniversary of the April 16 tornado that destroyed the retailers Sanford, N.C., store, Lowe’s today launched a “Give Back. Pay it Forward” event with American Red Cross.
From April 13-17, Lowe’s has set up collection areas in Sanford and online so people can donate to the relief organization. The American Red Cross will also host a blood drive on April 16 at the store.
On April 14, American Red Cross representatives will distribute disaster preparedness tips and be on hand to answer questions from 9 a.m. to 2 p.m. at the Sanford store.
The Mooresville, N.C.-based company’s Sanford store that received national attention after its destruction April 16, 2011, reopened Sept. 8.
City offers $1 million tax incentive to keep Yale Lock
After hearing that Yale Lock planned to close its local factory, town leaders in Lenoir City, Tenn., geared into action last week, according to reports by WBIR-TV.
The City Council decided on April 2 to offer Assa Abloy, the Swedish parent company of Yale Lock, a 100% property tax abatement if the company abandons its plans to consolidate its Lenoir City manufacturing operation with another factory in Connecticut. The 10-year deal would save the company an estimated $1 million.
In lieu of taxes, the council proposes taking ownership of the property and leasing it to Yale Lock. The manufacturing plant has been in Lenoir City for more than three decades and employs more than 200 people. Current plans call for a shutdown of the factory over the next 12 months. No response to the offer from Assa Abloy has been reported.