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Beige Book: Weaker economy for Ohio
A six-week snapshot of economic activity in Ohio and nearby areas indicates conditions have somewhat weakened since the last report, according to the Federal Reserve’s Cleveland district bank.

The Cleveland Fed in its “beige book” analysis of Ohio, eastern Kentucky and western Pennsylvania, reported signs of further deterioration since mid-April. That’s the story for much of the rest of the nation, with all 12 of the district banks indicating economic conditions stayed weak or got worse through May.

Details from Fed contacts by industry:

• Manufacturing – With production down slightly through this year but off sharply compared with 2008, most Fed contacts aren’t expecting conditions to bottom out until at least the third quarter. Steel processors, however, are seeing a sharp decline begin to level off, but no turnaround is expected this year. Most respondents said they’ve cut payroll costs by layoffs, wage cuts and a reduction in hours.

• Real estate – The Fed noted an increase in optimism among respondents, though conditions remain rough compared with last year. Residential builders expect activity to remain relatively unchanged in the next few months, though some are hopeful an uptick could take place before the end of the year. Both residential and commercial builders noted troubles securing financing, which has led to construction delays or shutdowns on the commercial end.

• Consumer spending – The Fed reported relatively stable sales for retailers in the last six-week period, with most not expecting major changes through September. New-vehicle sales, contacts said, dropped during the period amid an ongoing crisis in the industry, though used car lots saw a “modest improvement.”

• Banking – The Fed tracked mixed demand for commercial and industrial loans, though refinancing applications on the residential side remain “very strong.” Core deposits jumped sharply during the six weeks even as competition declined, the Fed said. As for tighter lending standards, they’re “firmly in place” with no expectations for easing up.

• Energy – Coal companies have reported production declines as demand from utilities has declined because of excess inventory. At the same time, prices for coal dropped sharply, while gas and oil prices were steady or on the rise.

• Transportation – Freight companies reported low volumes but told the Fed they’re seeing this year’s decline moderate. Most Fed contacts expect conditions to hold steady through September.

http://www.bizjournals.com/dayton/stories/2009/06/08/daily48.html