November 4, 1992
Summary
District economic activity continues to expand, albeit modestly.
Employment at manufacturing firms appears to have increased, while
employment at nonmanufacturing firms has shown little change.
Single-family housing construction remains substantially above its
year-ago level throughout the District. All categories of loans at
large District banks showed increases during the past two months.
Record corn, soybean and rice yields have been reported in many
areas of the District.
Manufacturing
District manufacturing firms continue to increase employment, with
reports of employment growth outnumbering reports of decline. For
example, an apparel maker announced that it will expand its Kentucky
plant and hire an additional 1,000 workers, but a maker of household
appliances, citing sluggish sales, will lay off 680 Louisville
workers next month. In addition, a truck and tractor manufacturer in
Kentucky plans to shift production from abroad, increasing
employment by 140 in the District. Two paper manufacturers will open
new plants in Kentucky, adding 650 jobs. In Indiana, another
household appliance concern laid off 850 workers for both seasonal
and cyclical reasons. In Tennessee, a carton-printing plant will
close, eliminating 100 jobs, while a fireplace manufacturer
increased employment by 195 because its headquarters moved from
California. A St. Louis auto plant laid off 100 more workers than
originally anticipated, but an area plastic container maker
announced that it will triple the size of its plant, resulting in
200 additional jobs. A northeast Mississippi sportswear manufacturer
is expanding its productive capacity and increasing its workforce by
100.
Nonmanufacturing
Most District nonmanufacturing firms report no significant
employment changes; however, a few noteworthy exceptions exist. In
St. Louis, a major telecommunications organization announced the
relocation of its corporate headquarters to San Antonio, Texas,
moving about 500 jobs and employees. In Louisville, a credit card
processor will double its employment to 160 within the next year.
Construction and Real Estate
Builders in most parts of the District continue to report
substantial year-over-year increases in single-family housing
permits. Although activity in the booming northwest corner of
Arkansas has recently slowed, housing construction throughout the
state is expected to remain strong through year-end. In light of the
low level of interest rates, some contacts note that sales activity
is not especially vigorous; one agent attributed this to the
difficulty potential buyers have raising a down payment.
Banking and Finance
Loans outstanding at 12 large District banks rose modestly in August
and September after declining slightly in June and July. Total loans
on the books of these banks rose 2.2 percent during August and
September after declining 0.6 percent during the prior two months.
Business loans rose 3 percent, real estate loans rose 1 percent and
consumer loans were up 2.5 percent in August and September. In
contrast, business loans declined 2.3 percent and real estate loans
declined 1.7 percent in June and July. Consumer loans are up almost
5 percent since the end of May.
Agriculture and Natural Resources
Harvest reports throughout the District indicate good to excellent
yields for corn, soybeans and rice. Record rice and soybean yields
are expected in Arkansas, and contacts in Kentucky and Tennessee
report record corn yields. The cotton harvest, on the other hand,
continues to be hampered by adverse weather conditions; likewise,
harvesting of the corn crop remains well behind normal in the
northern parts of the District. Crop and livestock prices across the
District are generally below last year's levels. Contacts in
Arkansas and Mississippi report that farm machinery and equipment
sales are down slightly from last year. Year-to-date Southern Pine
lumber exports, while down 27 percent from an unusually high June
level, are up 16 percent from the same period last year. With the
exception of western Kentucky, District coal production on a year-
to-date basis is down slightly from last year.
Transportation
Contacts report that barge activity has slowed recently because of
the late fall harvest. The prospect of bumper corn and soybean
crops, however, is expected to increase barge activity measurably in
the near future. Aircraft operations on a year-to-date basis are up
moderately at most major District airports, and the St. Louis
airport is anticipating a record year in terms of passenger
movements.