BOSTON – While New England’s tourism industry ended the year “on a high note,” the rest of the region’s economy continued to grow modestly, according to the Beige Book report from the Federal Reserve Bank of Boston.
The improvement in the tourism industry was led by strong domestic and international corporate business travel and international leisure travel, according to the report, which also reported that restaurants saw less spending on corporate entertaining and end-of-the-year holiday events.
“Advance hotel booking data indicate that the strong trend in business travel will continue, leading to an expectation that occupancy rates will hold level in 2013 compared to the high benchmark established in 2012,” said the report.
Overall, economic activity in the New England area “continues to grow modestly,” according to the Beige Book, which reported that contacts in the retail and tourism industries cited year-over-year increases in demand.
On the whole, manufacturing in New England continued to expand during the fourth quarter of 2012, with seven of 11 responding firms reporting higher sales in the fourth quarter of 2012 than during the fourth quarter of 2011.
Similarly, the report found that consulting and advertising firms finished 2012 stronger than they did 2011, “although a couple of companies with fast growth over the last few years have recently seen business level off.”
The Beige Book said that commercial real estate contacts were downbeat and office leasing is slow, as is demand for commercial real estate loans and commercial construction. Comparatively, the residential real estate market continued to recover during the quarter, with both sales and prices in November above year-earlier levels.
Even though the New England area showed steady economic growth during the quarter, the Beige Book reported that contacts said “hiring depends on demand growth,” and found that most firms are doing little to no hiring at the moment. “Notwithstanding ongoing concerns with uncertainty, contacts generally expect continued modest growth in 2013,” said the report.
The Federal Reserve publishes the Beige Book eight times each year. The report is considered an informal gauge of the regional economies in the United States.
The First District, which is overseen by the Federal Reserve Bank of Boston, includes the six New England states.
The U.S. economy picked up across much of the country last month, boosted by auto and home sales, even as the outlook for unemployment showed few signs of improvement, the Federal Reserve said.