New England economy grows at moderate pace
The New England economy continued to grow at a moderate pace, and many businesses expect slow improvement in the second half of the year, according to a survey by the Federal Reserve.
Retailers, the tourism industry, manufacturers, and advertising firms reported modest sales increases, although there were no significant changes in hiring.
“Consumer sentiment continues to pick up, albeit very slowly, and prices at the wholesale and retail levels remain steady,” the report said. “All of the contacts expect continued slow-growth of the US economy.”
The survey, known as the Beige Book, collects anecdotal information from businesses in each of the 12 Federal Reserve districts. It is published eight times a year in advance of the central bank’s policy making meetings. Fed officials next meet in Washington on July 30 and 31.
The Beige Book also characterized national economic growth as modest to moderate. In New England, the survey showed that single-family home and condominium sales rose in May, and that demand for housing was strong across the region, particularly in urban areas.
Slight increases in interest rates will likely spur home buying as buyers try to lock in historically low interest rates, according to the Fed.
Commercial real estate markets are solid, the survey said, and rents on prime retail properties in Boston are climbing.
Most regional manufacturers reported modest increases in sales, despite weakness in the European economy and volatility in exports to China. Most said they expected stable or higher sales moving forward
But one unnamed gun manufacturer in Connecticut announced plans to relocate to South Carolina in response to that state’s passage of stricter gun-control laws. “Other gun manufacturers in the state are reportedly likely to follow suit in the coming months,” the Fed’s report said.
New England retailers said sales rose 1-to-5 percent from a year ago and hotel revenues were up 1.5 percent. Restaurant revenues were up a better-than-expected 2 percent, due to strong corporate business travel and entertaining. Attendance at museums and other attractions fell below expectations, according to the survey, possibly due to record-setting rainfall in New England during June.
Hiring appeared stagnant. While companies did not report staff reductions, the only firms hiring significantly are rapidly growing companies in the technology and life science areas.
Consulting and advertising firms reported a generally positive “but not exuberant” second quarter. Large strategy consulting firms were faring well, the report said, largely due to “the recently booming private equity industry.”Megan Woolhouse can be reached at firstname.lastname@example.org.