Beige Book: Outlook ‘cautiously positive’

THE OUTLOOK is “cautiously positive” in the First District, according to the Beige Book, the Federal Reserve’s snapshot of economic data. / BLOOMBERG FILE PHOTO/BRENT LEWIN
THE OUTLOOK is “cautiously positive” in the First District, according to the Beige Book, the Federal Reserve’s snapshot of economic data. / BLOOMBERG FILE PHOTO/BRENT LEWIN

PROVIDENCE – The Beige Book, the Federal Reserve’s snapshot of economic data, said the outlook is “cautiously positive” in the First District, which comprises all of New England except Fairfield County in Connecticut.
Reports are based on data collected from early January through Feb. 22.
The Beige Book said commercial leasing activity slowed somewhat in Providence and deals were proceeding at a slower pace, and that one contact was a “bit less enthusiastic than in the previous report” regarding commercial leasing demand.
It said the slowdown in Providence was due to “heightened uncertainty stemming from stock market volatility and the national election cycle.”
However, it did say that investor interest in Providence’s commercial properties is reportedly increasing, even though bidding remains conservative.
Going forward, it noted the potential for the 1.1-million-square-foot mixed-use and bioscience center in the I-195 Redevelopment District. In January, CV Properties LLC and Wexford Science & Technology LLC signed a purchase and sale agreement for two I-195 parcels for the project.
It also said that civil construction is set to increase in Rhode Island in the coming year as the state secured new funding for infrastructure repairs, alluding to the recent passage of Gov. Gina M.Raimondo’s RhodeWorks truck toll plan; roads and bridges will be repaired through the tolls collected.
The report said that residential real estate markets in the First District exhibited strong performance through the end of 2015, noting that closed single-family home sales increased on a year-over-year basis in every state.
Massachusetts, it said, experienced the largest December sales volume since 2004. Median sales prices also increased, except in Connecticut where they declined modestly, it said.
A Rhode Island contact said that although this was the first decrease in closed sales for condominiums since March, positive pending sales numbers indicate a strong outlook moving forward.
Demand is “robust” in Massachusetts and the Greater Boston area, and a contact in Boston said Realtors are “desperate for listings.” But contacts from other states viewed inventory levels as less of an issue: one in Rhode Island said “there is a decent supply of homes to choose from.”
Industry contacts say that residential markets will continue to perform well in 2016. Many contacts said that mild weather boosted activity this winter.
“Contacts are unanimous that the increase in interest rates hasn’t reduced demand and that buyers continue to be eager. Several also note that expected 2016 increases in mortgage rates provide incentives for buyers to act now,” the report said.
Other highlights:

  • Of nine manufacturing firms contacted this cycle, three report lower sales than a year ago.
  • Retailers provided a mixed assessment of current conditions. Given the relatively mild winter in most of New England, seasonal item sales were slow.
  • Staffing contacts report continued strength in New England, with revenue growing 10 percent to 60 percent year over year.
  • Labor demand grew in expand in recent months, particularly in the IT, specialty manufacturing, Web service, legal, welding and health care sectors.

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