Beige Book: Businesses report moderate growth

FIRST DISTRICT businesses in early November reported ongoing moderate growth in sales or revenue, according to the latest Federal Reserve Beige Book report.
 / BLOOMBERG FILE PHOTO/BRENT LEWIN
FIRST DISTRICT businesses in early November reported ongoing moderate growth in sales or revenue, according to the latest Federal Reserve Beige Book report. / BLOOMBERG FILE PHOTO/BRENT LEWIN

BOSTON – First District businesses reported ongoing moderate growth in sales or revenue, according to the Federal Reserve’s Beige Book report released Wednesday.
The First District includes all of New England, except Fairfield County in Connecticut, and businesses were polled about the period from early October through mid-November.
Highlights of the report include retailers citing year-over-year sales results ranging from very small declines to mid-single-digit increases, manufacturers reporting increased sales from a year ago and staffing firms noting “fairly strong” year-over-year revenue increases in recent months.
In the retail sector, all categories of apparel, furniture and home furnishings sold well, and retailers said they plan to hire more workers, raise wages for some or all positions to attract new hires, and raise wages for some or all categories to retain workers.

All nine manufacturing respondents reported increased sales compared with last year. A manufacturer of specialty chemicals reported that his plants are running “24/7.” In addition, a milk producer said that milk prices were down 10 or more percent versus a year ago.

However, hiring remains an issue in this sector, despite stronger sales. Only two contacts reported major hiring, the report said.

“One, a specialty chemical manufacturer, said that finding hourly workers was exceedingly difficult. This contact said that only one out of every three or four hourly hires works out; the problem is absenteeism, with many workers unable or unwilling to work five days in a row. Another respondent said that eight out of 10 potential hourly hires either cannot pass a drug test or cannot pass a simple math test. Several of our contacts said they had trouble finding engineers. Two contacts reported lower headcount due to ‘attrition’ or new systems,” the report said.

- Advertisement -

Commercial leasing activity was flat or slightly higher across the First District.

In Rhode Island, commercial leasing activity “was up modestly” from the third quarter, while the office vacancy rate decreased significantly from a year earlier; asking rents for office space also are on the rise, according to the report.

“A contact noted that despite these improved fundamentals, office rents in downtown Providence remain too low to justify new office construction,” the report said.
One Providence contact also cited space constraints as a barrier to economic growth.

The overall outlook among the contacts was “cautiously optimistic,” with most saying it was too early to assess the incoming Trump administration’s effect on commercial real estate markets.
As for residential real estate sales, a contact in Rhode Island called 2016 “a banner year for home sales.”

“Overall, contacts seemed optimistic about the outlook. Many were wary of low inventory, but maintained that buyers seemed unfazed by the heavy competition and high prices. Several contacts cited low interest rates, low unemployment and the stable economy as reasons for their optimism,” the report said.

No posts to display