Fed Beige Book-Dallas: Econ Expanded At A Moderate Pace -2 ...

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WASHINGTON (MNI) ? The following is the second part of the latest
Beige Book survey of economic conditions in the Federal Reserve?s
Eleventh District, published Wednesday:

ELEVENTH DISTRICT-DALLAS

Construction and Real Estate Single-family housing activity
continued to increase at a good pace over the past six weeks. Contacts
said new and existing home sales outpaced expectations, and new home
construction activity increased. Inventories of both new and existing
homes remained tight, leading to price gains. Apartment construction
picked up since the last report, and outlooks for the multifamily sector
remain quite optimistic. Leasing activity in the office and industrial
real estate sectors remained steady at a good pace. While commercial
construction remains at low levels, contacts expect activity to improve.

Financial Services Overall, financial firms reported flat loan
demand. Auto loan demand, particularly for new autos, was a bright spot,
and energy-related lending remained strong. Business lending and
commercial real estate lending were weak. Loan pricing remained very
competitive and has squeezed profit margins. Loan quality continued to
improve as delinquency rates trended down and new loans are granted to
more creditworthy customers. Deposits kept growing even as rates
remained very low. Outlooks were mixed, and contacts said fiscal worries
were negatively impacting loan demand.

Energy Respondents at energy-related firms said business remained
strong with long lead times, although the District active rig count
declined modestly over the reporting period. Producers concentrated
their production on oil, as the prices of both natural gas and natural
gas liquids remain very low. Outlooks were essentially flat. Activity
was robust but there is little hope for further improvement through the
end of the year.

Agriculture The District remained largely in drought, although
scattered rainfall improved soil moisture conditions in several areas.
Crops were mostly in fair to good shape. Production is expected to be
better than last year-when the drought was much more severe in the
Eleventh District-but below average because of ongoing dry conditions.
Grain prices remained high due to the Midwest drought, adversely
affecting Texas? large livestock sector as feed costs reached record
highs.

(2 of 2)

** MNI Washington Bureau: 202-371-2121 **

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Source: http://www.forexlive.com/blog/2012/10/10/fed-beige-book-dallas-econ-expanded-at-a-moderate-pace-2/

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