The economy in Colorado and six neighboring states “expanded solidly in late February and March,” the U.S. Federal Reserve reported Wednesday in its latest Beige Book survey of the region’s business executives.
The local report was consistent with those of the nation’s other 11 districts, which all reported at least moderate economic improvement since the last report.
Colorado and neighboring states are part of the Fed’s 10th District, based in Kansas City. Each district released its own Beige Book Wednesday.
During the six-week period since the last Beige Book, regional consumer spending rebounded in March after severe weather limited February sales, and retailers expected their sales will rise in the next three months, according to the report.
In the manufacturing sector, “factory production rose sharply, allowing manufacturers to rebuild inventories and fulfill a surge in new orders,” the report said.
Residential construction remained weak, the report said, and commercial construction rose modestly. “Strong commodity prices boosted profits at energy and agricultural enterprises,” according to the report.
The region’s bankers reported weaker loan demand, higher deposits and improvements in loan quality.
Despite tighter labor markets, especially for skilled workers, regional business owners “did not expect to raise wages in order to hire new workers,” the report said. But “more manufacturers and distributors expected to pass through higher raw material and fuel costs to finished goods prices, and more retailers expected to raise selling prices in the coming months.”
District manufacturing activity “expanded rapidly and business activity for high-tech service and transportation firms improved,” the report said, and “factory managers reported a surge in production and shipments at both durable and non-durable goods plants.”
In the real estate sector, “the inventory of unsold homes grew substantially as more homes were placed on the market and real estate agents anticipated further home price declines,” the report said.
Mortgage loan activity in the region “plummeted” because of a sharp decline in refinancing demand, according to the report.
Regional energy contacts reported increased drilling activity, with exploration shifting away from natural gas toward crude oil, the report said.
The Beige Book reports, which got their nickname from the color of their covers, is based on interviews with a sample of business executives in key industries in each district.
The Fed’s 10th District includes Colorado, Kansas, Nebraska, Oklahoma and Wyoming, as well as western Missouri and northern New Mexico.
The latest report is based on information collected through April 4.
Source: Denver Business Journal – by Heather Draper Date: Wednesday, April 13, 2011, 2:48pm MDT – Last Modified: Wednesday, April 13, 2011, 3:03pm MDT
