Beige Book: Businesses expect their positive outlook to continue

BUSINESSES IN the First District have a generally positive outlook, according to the Federal Reserve’s latest Beige Book report on the economy. / BLOOMBERG FILE PHOTO/BRENT LEWIN
BUSINESSES IN the First District have a generally positive outlook, according to the Federal Reserve’s latest Beige Book report on the economy. / BLOOMBERG FILE PHOTO/BRENT LEWIN

BOSTON – Businesses in New England’s First District have a generally positive outlook, as they continue to report rising revenue, and they expect that to persist, according to the Beige Book, the Federal Reserve’s report on economic data, released Wednesday.
The First District comprises all of New England except Fairfield County in Connecticut.
Mostly positive results were reported by retailers and tourism contacts, while two-thirds of contracted manufacturers, software and information technology firms reported sales increases.
Home sales rose in all six states, but commercial real estate market conditions varied across the region.
“More respondents say they plan to increase hiring than has been the case in the last few Beige Book rounds and some mention wage increases. Contacts cite no price issues, although several manufacturers and retailers note positive effects of low energy prices,” the report said.
As for tourism, the report said that 2015 results for Boston hotels recently were released, showing that new all-time highs were set for occupancy rates (81.8 percent) and average room rates ($255 per night, a 6 percent increase compared with 2014).
“The hotel forecast for 2016 as a whole is robust. … Boston’s tourism forecast for the second quarter is strong; besides the seasonal boost from college graduations, more corporate meetings are scheduled and leisure travel is expected to benefit from the beginning of new and/or direct flights from Europe and China,” the report said.
As for manufacturing, several firms reported that it is hard to find or keep workers; a manufacturer of garden hoses said that finding low-skill workers has become “very problematic.” Also, a chemical firm is raising wages by 15 percent at a southern U.S. facility to keep trained workers from leaving.
There were mixed reports from commercial real estate markets across the First District. Office-leasing activity is increasing in Portland and strong in Boston, but remains slow in Providence.
In Greater Boston, the office vacancy rate continued to fall, to as low as 6 percent in the Cambridge area, and rents increased marginally.
It said construction increased modestly in Providence, thanks to new institutional projects.
Residential real estate markets in the First District had a strong start so far this year, with single-family home sales increasing in February on a year-over-year basis in all six states.
Massachusetts had the most closed sales in the month of February since 2007.
Contacts unanimously cited the mild winter weather and low mortgage rates as explanations for higher-than-usual demand.
”While Rhode Island and the Boston area experienced significant increases in median sales price, all other areas saw only small increases or decreases,” the report said.
Also, for both single-family homes and condominiums, inventory decreased or remained flat year-over-year in every state but Rhode Island.
“Despite the modest inventory increase in Rhode Island, our contact says that the ‘quickening pace of sales is beginning to outstrip supply,’ ” the report said.

No posts to display