PROVIDENCE – Business respondents in New England reported signs that the economy is slowing since the prior report at the start of September, according to a Beige Book report from the Federal Reserve released Wednesday.
Growth was described as subdued, hampered by sluggish job growth, choked by a shortage of workers.
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The United States economy was found to have expanded at a slight to modest pace since the prior report.
The Fed found the labor market in New England remained tight despite a couple of firms beginning layoffs in the First District. The survey found that no manufacturers in the region who were contacted reported an expansion of workers and two reported significant layoffs. In contrast, two respondents said they had difficulty finding qualified applicants.
The Fed found that most reports from manufacturers were negative. No contacts reported positive revisions to capital spending plans. Five of seven respondents reported a negative revision to their 2020 outlook.
The Providence area was reported to have an uptick in office leasing but remained “tepid.” Office leasing was outpaced by demand for industrial property in the area. Office rent increases were “moderate” while industrial rents increased faster.
Transactions in the Providence investment sales market were limited, according to the report. One respondent said people were hesitant to commit to new construction due to uncertainty related to the next possible recession.
Single-family home sales decreased moderately year over year in August in Rhode Island. The Fed’s Rhode Island contact said there is an ongoing shortage of active listings, limiting the market.
Condominium sales increased year over year in the state.
Retailers reported that the labor market is tight in the region. Retail prices in the region remained steady. Some contacts reported that trucking prices had dropped steadily from last year. Some manufacturers reported an increase in prices due to tariffs.
Retailers in the region reported a range of outcomes spanning a decline of 6% in sales year over year to a gain of 2% in sales.
The Fed found that software and information technology services showed growth exceeding expectations for a majority of respondents. Respondents maintained a positive outlook but many remained cautious of political and macroeconomic uncertainty.
Chris Bergenheim is the PBN web editor. You may reach him at Bergenheim@PBN.com.
