Carolina Economic Indicators Down in Federal Reserve Report

Economic activity declined in January and February in the Federal Reserve District that includes both Carolinas.

The Federal Reserve Beige Book is published eight times per year and contains anecdotal information on current conditions. Both Carolinas are part of the Richmond District.

Among some of the findings impacting South Carolina and North Carolina in this edition:

- Real estate business remained “very slow” in Greenville, SC. House prices dropped across much of the District.

- A producer of automotive upholstery fabric in North Carolina said his company was facing deep declines in orders, while a machinery manufacturer in South Carolina noted that many of his suppliers were in dangerously poor financial health.

- A primary metal manufacturer in South Carolina told us that the price for his product had dropped about 50 percent from last August and that without fast improvement, layoffs will deepen and wages and benefits will tighten.

- Residential lenders reported that activity picked up in January and February. The uptick was centered on firmer demand for refinances, which comprised 65 to 80 percent of applications since our last report.

- Overall tourist activity along the coast was a bit weaker when compared to our last report and to a year ago. An analyst from Myrtle Beach attributed the weakness to ongoing concerns about the national economy. He also indicated that the reduced bookings had pushed hotels to roll out discounts earlier.

- Residential lenders reported that activity picked up in January and February. The uptick was centered on firmer demand for refinances, which comprised 65 to 80 percent of applications since our last report.

- Managers at big box discount stores in central North Carolina told us the weak economy had raised both their customer traffic and their revenues.

The Beige Book overall outlook for jobs says business contacts across the service sector reported decreases in revenues and employment.

Temporary employment agents also described reduced demand for workers, although they were somewhat optimistic about the next six months.

You can read the complete Federal Reserve report for the Richmond District by clicking here.

The Richmond Fed is one of 12 Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The region takes in Virginia, Maryland, North Carolina, South Carolina, the District of Columbia and most of West Virginia. Offices are in Richmond, Baltimore and Charlotte.