Philadelphia Region (Delaware) Beige Book Extracts

Beige Book Report from the Federal Reserve:

Consumer spending was softer in nearly all Districts. Retail sales were reported to have weakened or declined in Philadelphia, Cleveland, Richmond, Atlanta, Chicago, Minneapolis, and Kansas City; Dallas and San Francisco cited weak or sluggish sales; and Boston and New York indicated that sales were mixed and moderately below plan sales, respectively.

Philadelphia indicated concerns over restrictions in access to credit were limiting future capital expenditures for some manufacturers. In contrast, Kansas City and Chicago reported that capital spending for producers of heavy machinery continued to be strong.

Minneapolis reported continued strength in professional business services, while demand for professional business services was down in San Francisco and Philadelphia.

Philadelphia indicated concerns over restrictions in access to credit were limiting future capital expenditures for some manufacturers. In contrast, Kansas City and Chicago reported that capital spending for producers of heavy machinery continued to be strong.

Staffing firms reported lower demand for their services in Richmond, Philadelphia, and Chicago, but noted steady demand in Dallas.

Atlanta reported that production remained at a low level, while Minneapolis described conditions as mixed and Philadelphia noted a slight increase in activity.

Kansas City, Richmond, Philadelphia and Chicago reported continued strength in exports.

Housing activity was reported to have moved lower in Boston, New York, Philadelphia, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco.

the inventory of unsold homes was reported to have declined in areas of the Boston and Atlanta Districts as well as in Philadelphia and Cleveland.

Philadelphia,Dallas, and San Francisco noted increased discounting by retailers;

THIRD DISTRICT – PHILADELPHIA (Overview)
Business conditions in most sectors in the Third District softened from August to September. Manufacturers, on balance, reported a very slight increase in new orders but a steady rate of shipments. Retailers generally posted month-to-month and year-to-year declines in sales, as did motor vehicle dealers. Bank loan volume has been nearly flat in recent weeks. Residential real estate sales and construction activity continued to fall. Commercial real estate leasing and construction activity have slowed. Services sector firms generally indicated a slowing pace of business. Reports of increases in input costs and output prices were somewhat less widespread among business contacts in September than they were in August. The outlook among Third District businesses is generally not positive. Although manufacturers surveyed in early September forecast increases in business activity during the next six months, contacts in other sectors do not expect improvement. Retailers expect a difficult holiday shopping period. Auto dealers see no signs that sales will pick up soon. Bankers anticipate slow loan growth and weakening credit quality into next year. Residential real estate agents and home builders expect sales to continue to remain slow until the latter half of 2009. Contacts in commercial real estate expect leasing and construction activity to decline during the next several quarters.