The U.S. economy continued to expand at a modest-to-moderate pace from mid-February through the end of March the per today’s report from the Federal Reserve. The Beige Book Report from the twelve Federal Reserve Districts indicated that the economy continued to expand at a modest to moderate pace from mid-February through late March.
Activity in the Boston, Atlanta, Chicago, Dallas, and San Francisco Districts grew at a moderate pace, while Cleveland and St. Louis cited modest growth. New York reported that economic growth picked up somewhat. Philadelphia and Richmond cited improving business conditions. The economy in Minneapolis grew at a solid pace and Kansas City’s economy expanded at a faster pace.
Texas (11th District)
The Eleventh District economy grew at a moderate pace over the past six weeks. Overall manufacturing activity continued to expand. Demand for business services rose slightly, and transportation services activity remained positive overall. The housing sector continued to improve modestly, and nonresidential leasing activity remained solid. Respondents said retail sales grew at a modest pace and auto sales strengthened. Financial firms noted a modest pickup in loan demand. Energy activity continued to be strong, although gas-directed drilling activity weakened. Drought conditions improved. Employment levels were steady to slightly higher. Prices were unchanged or somewhat higher, according to contacts. Outlooks across industries remain positive, but more respondents noted concern about higher energy costs.
Commercial Real Estate
Office and industrial leasing activity continued to improve. Contacts noted that the energy and high tech sectors were driving much of the demand for space. Sales of nonresidential investment properties were unchanged over the past six weeks. Respondents noted some trepidation among investors, even though capital is widely available. The one exception was apartment properties, which remain popular among investors according to contacts.
Houston Economic Update
Economic activity in the Houston metropolitan area, as measured by the Federal Reserve Bank of Dallas business-cycle index, grew at an annualized rate of 5.4 percent in February — significantly outpacing all other major metro areas in the state. Despite persistent worries from the international economy and the drag of sustained high oil prices on the nation, the outlook for Houston remains positive, with hydrocarbon industries and manufacturing leading the way and fueling the growth of Houston’s other industries and international trade.