The Austin MSA is part of to the Federal Reserve’s Eleventh District. On March 3, 2010, the Federal Reserve released its current report (one of eight per year) on the national and district economy. Known as the Federal Reserve Beige Report, the Eleventh District’s overall assessment of the economy indicated “Economic activity improved further in the Eleventh District over the past six weeks. Firms across a wide range of industries continued to report slight increases in demand. However, conditions in a few sectors, notably commercial real estate, financial services and construction-related manufacturing remained weak. Outlooks were generally more upbeat than last time.”
Real Estate observations included, “new home construction picked up recently in response to relatively tight inventories and the first-time homebuyer tax credit. In both new and existing home markets, sales of lower priced homes remained the strongest. Sales of higher priced homes were weak, reflecting difficulties in obtaining financing for larger loans. Builder outlooks were slightly more optimistic for 2010. Commercial real estate activity remains depressed. There is continued downward pressure on rents. Office leasing activity is still falling, albeit at a slower pace. Demand for industrial space declined further in Dallas, but improved slightly in Houston. Investment sales transactions remain low due to the tight lending environment, but contacts report that investors are watching closely for bargains. Commercial construction activity is still weak and outlooks remain grim, with most contacts expecting no improvement until 2011.”
Financial comments included “Real estate lending remained scarce due to stringent regulatory requirements, and contacts at community banks expressed concern about the possible effects of these regulatory requirements on their ability to expand. Some contacts said they were beginning to see an improvement in loan quality, with falling delinquencies and declining charge-offs. The outlook remained cautious but some contacts were hopeful that they may see a pickup in loan demand by year end.”
Labor Market noted “stable employment levels.” Manufacturing Market concerns were “outlook is still bleak, especially for manufacturers tied to commercial construction.”
This overall assessment of the economy indicates recovery has begun to occur in many sectors and outlooks are becoming more positive. However, most experts expect a slow and modest Metro-wide recovery.
