September 8, 2010
Boston Globe – By Robert Gavin, Globe Staff
The New England economy fared better than the nation as a whole in recent weeks, as businesses in several of the region’s key industries reported “upbeat” results, according to a Federal Reserve survey released today.
The survey, which comes out eight times a year, said the national economy appeared to slow significantly in recent months, while business conditions across New England were “positive on average.” Still, some industries, such as retail and real estate, struggled.
The New England “outlook varies widely across sectors, from largely positive in manufacturing and software to cautious in retail and tourism and mixed among commercial real estate professionals,” the Fed reported.
The survey, known as the Beige Book, collects anecdotal information from businesses around the country in advance of the Fed’s rate-setting meetings. Policy makers are expected to hold the Fed’s benchmark interest rate near zero when they meet September 21.
New England manufacturers reported solid growth recently, with many citing strong demand from Europe, according to the Fed. They continue to hire cautiously, however, and employment at most firms remains below 2008 levels.
On the other hand, many New England software firms said they’ve added workers as revenues increased as much as 15 percent from a year ago. Staffing firms reported the greatest demand for workers came from technology companies, as well as light manufacturers and health care providers.
Tourism in New England was stronger than expected, but retailers are struggling with weak consumer spending, the survey said. Some retailers reported sales declines of as much as 10 percent from a year ago.
Leasing activity in commercial real estate was largely flat, while housing sales fell sharply in July as a result of the expiration of the federal home buyers tax credit, according to the Fed. Some real estate firms were optimistic that record low-interest rates and an improving economy would provide new sparks to home sales, but others expected slow going without the tax credit or a significant reduction in unemployment.