The overall economic picture for the Little Rock zone of the Eighth Federal Reserve District is mixed, according to the St. Louis branch’s latest Burgundy Book released Thursday.
The Burgundy Book (similar to the more well known Beige Book, but will a local focus), says that while general retail sales are slow, car dealers reported somewhat better news. Reports from manufacturing were mixed, while those from the service sector were more positive.
Click here (PDF) to download the full report of the Little Rock area.
Activity in the real estate and construction sector mostly declined, whereas reports on banking activity were somewhat positive. The agriculture and natural resources sector reported, on balance, negative news.
Retail Sales Up
The report said one-third of the general retailers and 40 percent of the car dealers indicated sales were up in October and early November compared with the same months in 2008. About 17 percent of general retailers and 20 percent of car dealers said sales were down. Among general retailers, 50 percent said sales met expectations, 25 percent reported sales below expectations, and 25 percent reported sales above expectations.
Among car dealers, 40 percent said used car sales had increased relative to new car sales, while none reported the opposite. Also, 20 percent noted an increase in low-end vehicle sales relative to high-end vehicle sales, but another 20 percent reported the opposite.
On net, manufacturing has declined slightly since the Fed’s previous report. Firms in the electrical component manufacturing industry reported plans to open a new facility. Contacts in the rubber tire manufacturing, heating, ventilation, and air conditioning manufacturing, and paper products manufacturing industries reported plans to expand existing facilities and operations, including hiring additional workers.
In contrast, a contact in the transportation industry reported plans to close a plant, resulting in a significant number of job losses. Firms in lumber manufacturing and furniture manufacturing also announced plans to decrease production and lay off workers.
The service sector continued to show signs of improvement, with a firm in business support services announcing a new facility and new jobs.
Home Sales, Lending
Compared with the same period in 2008, September 2009 year-to-date home sales in the Little Rock zone were down by 10 percent and September 2009 year-to-date single-family housing permits declined by 14 percent. The third-quarter industrial vacancy rate increased, but suburban and downtown office vacancy rates decreased.
Commercial and industrial lending activity was unchanged. Reports on the level of lending to consumers ranged from unchanged to a slight increase. Residential mortgage lending activity increased with multiple reports of higher demand for these loans. Several contacts also indicated that refinancing activity has increased in recent months.
Wet conditions caused delays in harvesting and winter wheat planting. November estimates showed yields for corn and cotton were 2 percent and 12 percent lower than last year’s yields, but yields for rice and sorghum were 1 percent and 6 percent higher, while soybean yields were the same.