BOSTON – The economic outlook in New England is “fairly positive,” according to the Beige Book report released by the Federal Reserve Wednesday afternoon.
Generally, Federal Reserve business contacts reported year-over-year increases in economic activity and said they expect the current pace to continue to increase.
The report mentioned, however, that respondents in the software and information technology services, and staffing sectors said they believed the pace of growth was slowing.
In all sectors and “with few exceptions, businesses are not hiring much beyond replacement,” said the report.
The retail sector appeared to be bouncing back from the negative impact of a “harsh and prolonged winter,” but the late arrival of warmer weather has affected the sales of some seasonal items.
Retail respondents added that consumer sentiment seems “a bit more positive, especially over the last month or so, yet overall expectations remain cautious.” Overall in the retail sector, survey respondents predicted low, single-digit sales increases for the full year.
Through the first quarter, hotel revenue in the greater Boston area increased 2 percent year over year, as did occupancy rates. Restaurant revenue is 1.5 percent higher than a year ago. Much of the increase in tourism revenue was attributed to strong domestic and foreign business travel.
Three-quarters of manufacturers contacted by the Federal Reserve reported higher sales levels compared with the same period in 2012. “Geographically, firms say that Europe remains weak and that both the U.S. and Asia are growing, but slightly below expectations,” said the report. Several respondents reportedly added “unusually volatile” month-to-month readings.
Five of the Fed’s eight manufacturing contacts are hiring, although the report added that only one is hiring in “any significant way and their hiring is outside the U.S.” Furthermore, one of the contacts plans to lay off workers by 2 to 3 percent over the next six months.
Still, three-quarters of manufacturing contacts said they were “reasonably optimistic” about the region’s economic outlook.