In his weekly Data Digest newsletter, Associated General Contractors Chief Economist Ken Simonson quoted liberally from the June 8 Federal Reserve Beige book. The Beige Book is a summary of informal soundings of businesses in the Federal Reserve districts, which are referred to by their headquarters cities.
"Reports from the 12 Federal Reserve districts indicated that economic activity generally continued to expand since the last report (April 13, 2011), though a few districts indicated some deceleration," the Fed reported last week. "Some slowing in the pace of growth was noted in the New York, Philadelphia, Atlanta, and Chicago districts. In contrast, Dallas characterized that region's economy as accelerating. Other districts indicated that growth continued at a steady pace. The Chicago district reported a decline in [manufacturing] activity for construction materials.
"In terms of residential construction, activity has remained generally depressed, with a number of districts reporting a large overhang of distressed properties," the Beige Book report said. "However, a number of districts—New York, Cleveland, Atlanta, Chicago, and San Francisco—report improved prospects for development of multi-family rental properties.
"Nonresidential construction, though widely reported to be at very low levels, rose modestly in the Boston, Chicago, Minneapolis, and Dallas districts, though Chicago noted that public sector projects are becoming smaller. Cleveland observed a pickup in industrial and high-end commercial development but a pullback in healthcare-related projects. Richmond reported some pockets of strength in the retail market.
"More broadly, contacts in a number of districts expressed a general sense of optimism about the outlook for the second half of 2011," accordng to the Fed. "[Cleveland reported] a pickup in construction loan requests for multi-family dwellings. Boston noted an improved lending environment for commercial real estate, and demand for commercial mortgages increased in New York and Dallas."