PROVIDENCE – Economic activity in New England was “decidedly mixed,” with moderate growth on balance, from January through mid-February, according to the Federal Reserve’s Beige Book survey released Wednesday.
Labor markets in the region were said to be tight for skilled workers, with strong labor demand from manufacturing, legal services, health care, and scientific and technical firms, the Fed found.
Several manufacturers in the region reported difficulties finding qualified workers, and two said that absenteeism was a problem. Manufacturers in the region also reported strong to very strong results, the report found, with all respondents in the sector reporting higher sales.
Pricing reports in the region were mixed, with some manufacturers reporting higher nonlabor input prices, however, none expected to raise their output prices as a result.
Retail contacts in the region were said to be optimistic for the first time since the pandemic began, citing expectations that more widespread vaccine distribution and warmer weather would result in pent-up demand in the spring and summer.
Commercial real estate in New England was said to be mostly unchanged from December, with significant disparities between the industrial sector, where there were extremely low vacancy rates, and the retail and hospitality sectors, in which each continued to struggle with weak demand and declining property values.
The report said that a Providence-based contact reported a slight uptick in leasing activity in the area that was “noteworthy in that tenants expressed interest in longer-term leases.” The contact also said that concessions on Providence office space had increased, lowering effective rents, if not asking rents.
Commercial real estate demand in the region was expected to remain muted or to improve modestly in the first half of 2021 and subsequently improve significantly in the second half of the year.
Respondents also expected hotel demand in New England to rebound in mid-to-late 2021.
The residential real estate market in the region showed no signs of slowing, according to the Fed’s contacts, with closed sales increasing in all reported areas. Contacts in Rhode Island, Massachusetts and Maine saw high numbers of out-of-state buyers, especially in vacation communities, the report said.
