Overall Economic Activity
Economic activity continued to expand at a modest to moderate pace across the 12 Federal Reserve Districts in March and early April. Outlooks remained positive, but contacts in various sectors including manufacturing, agriculture, and transportation expressed concern about the newly imposed and/or proposed tariffs. Consumer spending rose in most regions, with gains noted for nonauto retail sales and tourism, but mixed results for vehicle sales. Manufacturing activity grew moderately, and demand for nonfinancial services was mostly solid. Residential construction and real estate activity expanded further, although low home inventories continued to constrain sales in several Districts. Loan demand increased, and commercial real estate activity and construction improved since the last report. Transportation services activity expanded in over half of the reporting Districts, buoyed by increases in port traffic and/or air, rail and/or trucking shipments. Agricultural conditions were little changed or worsened on net, in part due to persistent drought conditions. Contacts in the energy sector cited a pickup in activity, except in the Richmond District, where coal production was flat and natural gas production dipped slightly.
Tenth District- Kansas
Summary of Economic Activity
Overall economic activity expanded at a moderate pace in March, although more modest growth was reported across a few District sectors. Consumer spending, energy, and manufacturing activity increased at a moderate pace, while District real estate and business services firms reported a modest pace of growth. Bankers reported a moderate increase in overall loan demand, steady deposit levels, and a modest increase in loan quality. Agricultural conditions remained weak, as drought conditions emerged and production expectations declined. Employment and employee hours increased in most sectors, and contacts reported modest wage growth with moderate increases expected in coming months. Input prices were up moderately compared to the previous survey period, while selling prices rose modestly.
Real Estate and Construction
Real estate activity in the District continued to increase at a modest pace, and additional gains were expected in the months ahead. Residential home sales rose modestly, while home prices and inventories increased at a slight pace compared to the previous survey period. Sales of low- and medium-priced homes continued to outpace sales of higher-priced homes. Residential sales and home prices were expected to increase at a moderate pace in the months ahead, although one contact in Colorado reported that the typical spring seasonal pick-up in activity was slow to begin this year. Residential construction activity was mixed as construction supply contacts noted lower sales while builders reported moderately higher housing starts and traffic of potential buyers. Commercial real estate activity continued to rise at a modest pace, and expectations were for additional gains moving forward.
Bankers reported a moderate increase in overall loan demand for the month of March. Respondents reported a modest increase for commercial real estate loans and slightly improved demand for commercial and industrial and residential real estate loans. Consumer installment loans were down slightly, while agricultural loans were steady. Bankers indicated loan quality improved modestly compared to a year ago. In addition, respondents expected a modest increase in loan quality over the next six months. Credit standards remained largely unchanged in all major loan categories. Overall, bankers reported steady deposit levels.
For more information about District economic conditions visit: www.KansasCityFed.org/Research/RegionalEconomy
For more information about Commercial Real Estate Conditions in Wichita, Kansas check out our Q1 2018 Market Update