November 3, 1993
Overview
Most sectors unproved during the survey period. Manufacturing grew
after a flat trend lasting many months. Tourism, finance, and real
estate saw growth, and agriculture was recovering from the summer
drought. Retailing was down slightly, tough automobile sales were up
in some areas. Port activity was mixed.
Consumer Spending
Evidence on retail trends was mixed. Our regular mail survey
indicated that retail activity declined slightly in late
September/early October. Respondents reported that sales and
employment fell, while prices and wages rose. All other indicators
changed little. Survey respondents were optimistic about their
prospects for the next six months and expected increases in every
indicator. Other District contacts reported growth in some
categories, particularly automobiles
Manufacturing
Our regular mail survey of manufacturers indicated that District
factory activity improved in late September/early October, the first
time respondents reported improvement since January/February 1993.
Manufacturers saw increased levels of shipments, employee hours,
capital expenditures, and new orders. Order backlogs and the number
of employees changed little. Manufacturing prices increased no
faster than the general level of inflation.
Manufacturers remained optimistic about prospects for production and capital expenditures for the next six months. They expected employment to remain steady and manufacturing prices to increase no faster than general prices.
Ports
Representatives at District ports--Baltimore, Charleston, and
Hampton Roads (Norfolk)--indicated that exports were generally
higher in August than in July, while imports were mixed. Compared
with a year ago, imports were generally higher, and exports were
lower. Both exports and imports were expected to grow at all three
ports in the next six months. Charleston and Hampton Roads expected
exports to increase faster, while Baltimore expected more growth in
imports.
Tourism
Hotels, motels, and resorts throughout the District indicated that
tourist activity for September and the first three weeks of October
increased when compared to August and to a year ago. The respondents
attributed the improvement to good weather and an increase in
convention bookings. All of the respondents noted that fall bookings
increased compared to a year ago. Most of the respondents expected
tourist activity to continue to improve during the next six months.
Finance
District financial institutions contacted by telephone indicated
that credit conditions strengthened slightly during the last six
weeks. Respondents stated that commercial and consumer loan demands
were marginally higher. Commercial loan rates were flat, while
consumer rates fell slightly.
Residential mortgage demand increased during the last six weeks Refinancing activity rose, while mortgage originations were steady. Residential mortgage lending rates were moderately lower.
Residential Real Estate
Real estate analysts and homebuilders surveyed by telephone reported
that sales strengthened somewhat in most areas of the District.
Starts trended upward, while home prices remained mostly steady.
Analysts noted a particularly large increase in activity in Northern
Virginia. In Charleston, South Carolina, the lower-end market
remained flat because of the announced closing of the naval base,
while the resort/retirement market continued to strengthen.
Commercial Real Estate
Commercial real estate activity improved slightly throughout the
District during the past two months. Vacancy rates edged downward
because of the absorption of existing space. Analysts reported
little new construction, and virtually all new space was pre-leased.
Effective rental rates rose slightly at office space tightened and
as large discount retailers continued to expand substantially.
State Tax Revenues
State government revenues suggested moderate real growth (2 to 3 1/2
percent) in North Carolina, South Carolina, Virginia, and West
Virginia. Real revenue growth was less robust in Maryland, though
there were some areas of improvement, particularly in retail
collections. Real revenue growth remained flat to negative in the
District of Columbia.
Agriculture
Agricultural conditions improved tightly in the last six weeks. Cool
temperatures and normal rainfall in recent weeks improved the
District's pastures and hay crop. The fall harvest progressed at a
normal pace with the yields on most crops far below average, but
within the ranges forecast by agricultural analysts late in the
summer. An exception was tobacco, whose yields were better than
expected. Fall planting of winter grains began, but only 5 to 10
percent of the crop had been sown.