Nationally, the economy seems to be stabilized at a slow growth rate. Construction spending was essentially flat and consumer confidence was down slightly. The Non-Manufacturing report on business continues to be positive, but shows signs of slowing since the previous month. The inclement winter weather in the northeast has had a negative impact on business. The corporate real estate market across the region has remained stable, if weak (aside from NYC, which continues to remain decoupled from the rest of the region.)
Economic activity in the Second District (New York City area) declined modestly in the first few weeks of 2014, hampered by inclement weather. Contacts report some broadening of price pressures in the service sector, though retail prices remain mostly stable. Manufacturers in the District report that activity was stable whereas service-sector firms report some weakening, on balance. Labor market conditions have continued to improve gradually since the last report. General merchandise retailers report that sales were below plan and down sharply from a year earlier, due to unusually harsh weather in January and early February. New auto sales weakened noticeably in January but showed signs of rebounding in the first half of February. Tourism activity was mixed in January and early February, hampered by harsh weather but boosted by the Super Bowl. Housing markets were mixed, while commercial real estate markets firmed slightly. Finally, banks report some further weakening in loan demand from the household sector, little change in credit standards, and steady to declining delinquency rates.
Commercial real estate markets were stable to slightly stronger in early 2014…In New York City, office leasing activity was characterized as very brisk… Elsewhere around the District both office availability rates and rents were little changed in early 2014. In general, the market for prime (Class A) space has underperformed the rest of the office market. Industrial vacancy rates were mostly steady to down slightly across the District, while asking rents were little changed.
The U.S. Census Bureau of the Department of Commerce announced today that construction spending during January 2014 was estimated at a seasonally adjusted annual rate of $943.1 billion, 0.1 percent (±1.5%)* above the revised December estimate of $941.9 billion. The January figure is 9.3 percent (±1.8%) above the January 2013 estimate of $863.1 billion.
The Conference Board Consumer Confidence Index® Declines Moderately
The Conference Board Consumer Confidence Index®, which had increased in January, fell moderately in February. The Index now stands at 78.1 (1985=100), down from 79.4 in January. The decline was driven by the Expectations Index, which dropped to 75.7 from 80.8. The Present Situation Index, by contrast, climbed from 77.3 to 81.7.
Business Activity Index at 54.6%
New Orders Index at 51.3%
Employment Index at 47.5%
Economic activity in the non-manufacturing sector grew in February for the 49th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.
“The NMI® registered 51.6 percent in February, 2.4 percentage points lower than January’s reading of 54 percent.