Beige book shows moderate economic increases - by Consolo

A modest expansion in economic activity characterized much of the country from mid-August through early October, according to findings from the latest Beige Book (October 2015), the Federal Reserve’s summary of current economic conditions released to the public eight times a year. On the whole, the nation’s businesses reported optimism for the near future and consumer spending rose accordingly. Like the country, overall, New York State, the second of the nation’s 12 regional districts, experienced a modest level of economic growth, with selling prices largely remaining stable. Even so, New York’s tourism fell short, especially in New York City, where earnings from hospitality and theater venues were below 2014 levels. Better, was consumer spending, which rose moderately during August and September. Retailers, however, reported mixed outcomes, with a pre-2014 level drop in sales reported by a major chain during both months, while another chain determined an increase in sales, where higher revenues in August were followed by above-par levels in September. In upstate New York, retailers found sales to be solid in August, but slower in September, although inventory amounts and selling prices remained steady, in general. New York’s construction and real estate market was up, albeit modestly, except for the multi-housing residential construction market, which held a bracing pace. Western New York’s construction/real estate market was particularly strong, with an upward push in prices per a pressing demand for resold homes. In New York City, low inventories on the co-op and condo market didn’t deter sales, including short listing periods for available properties and sales completed at above-list prices. In Brooklyn and Queens, sales prices were up markedly from a year ago, while Manhattan saw a moderate rise. Residential rentals maintained their steady pace, with rents in Manhattan, Queens, northern New Jersey and upstate New York moderately higher than last year’s figures. Brooklyn’s trendiest areas, however, saw substantial increases. Rents for commercial office and industrial properties climbed, as a higher demand for the spaces was felt in New York City, Long Island, upstate New York, New Jersey and in Westchester and Fairfield counties. Conversely, retail spaces in New York City, Long Island and northern New Jersey were off, with vacancy rates at multi-year highs. Construction for commercial properties, although up, slowed in recent months with fewer new projects in the works. Residentially, construction of single-family homes was quiet despite an upward trend in multifamily builds, especially in New York City. With the exception of manufacturing, which reduced its workforce, New York’s labor market continued its climb, as businesses hired workers and expected to add more employees in the near future. Brisk hiring practices were reported by two New York City employment agencies, although upstate New York was moderate in hiring. Increasingly, job candidates found themselves choosing from several job offers, escalating starting salaries. Especially in demand were human resource and information technology professionals, along with truck drivers. Manufacturers reported flat-to-declining selling prices, and service firms found selling prices to be stable, but still pressured to increase in input prices and wages. Among the financial developments in the New York District were higher demands for commercial mortgages at small- to medium-sized banks, even though refinancing requests dropped from the year’s earlier levels. Credit standards at banks held steady in all categories, along with fewer delinquency rates for all loan categories, except consumer loans, where the rates leveled off. While New York State’s economic activity showed a few slow spots, most sectors saw moderate increases, a hopeful sign of even better days to come. In fact, consumer confidence in New York State and the surrounding region is at a multi-year high. Now that’s good news. Faith Hope Consolo is the chairman of Douglas Elliman’s Retail Leasing, Marketing and Sales Division, New York, N.Y.