WASHINGTON (MNI) – The following is the second and final section of
the text of the Eleventh District section of the Federal Reserve’s Beige
Book survey on current financial conditions released Wednesday:
Financial Services
Financial firms reported steady overall loan demand. Large banks
with a national footprint reported some pickup in commercial and
industrial loan demand with increased corporate activity, and commercial
real estate (CRE) activity has shown recent improvement as well.
Regional banks noted that loan demand remains pretty flat, although
optimism persists for pockets of homebuilding and some CRE lending
across the state. Demand for auto and consumer loans declined. Contacts
continue to note that loan pricing remains aggressive amidst a highly
competitive lending landscape. Outlooks are generally positive in light
of better outstanding loan quality and continued slow improvement in
lending conditions.
Construction and Real Estate
Eleventh District housing contacts said sales remain at low levels,
but optimism has increased along with better traffic. Sales are expected
to improve in the second half of 2011. As reported in previous reports,
sales in the higher price points continue to improve. Apartment demand
continues to accelerate, and rents have edged up since the last report.
Private nonresidential demand has improved. Leasing activity is
growing and there are reports that industrial and office construction
are increasing from very low levels. Sales of commercial buildings are
also picking up across the District. Energy Drilling activity is very
strong and growing, according to responding firms in the energy
industry. A majority of wells being drilled in the United States are
directed to oil for the first time since May 1995. Contacts noted Texas
is leading the expansion of domestic activity, with strong activity in
the Permian basin and Eagle Ford Shale. While the majority of activity
is land-based, work is being re-permitted in the Gulf of Mexico, and
service firms noted they are moving workers back into the Gulf area.
Respondents also noted that international work continues to grow.
Agriculture
The entire Eleventh District is experiencing drought conditions,
and the severity has progressed considerably. About half of the district
is now in exceptional drought, the most severe drought classification,
up from zero percent at the last report. The outlook for the wheat crop
is poor and it is likely that the cotton harvest will be down from last
year. Numerous wildfires have led to an estimated $20.4 million in
agricultural losses.
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** Market News International Washington Burea: 202-371-2121 **
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