New England economy grows modestly
Business activity in New England grew modestly in recent months, though many firms are passing higher costs on to consumers, according to a Federal Reserve survey released yesterday.
The survey, known as the Beige Book, found New England firms worried about rising prices for commodities such as cotton, milk, and steel, as well as rising energy costs.
“Commodity prices continue to be a concern for manufacturers,’’ the summary said. “Most of the affected companies have already raised prices with little push-back from their customers, and a number of them plan to implement further price hikes this summer.’’
The Beige Book, which collects anecdotal evidence from businesses from across the Fed’s 12 districts, is published eight times a year in advance of the the central bank’s rate setting meetings. Policy makers next meet June 21-22.
In New England, manufacturing, software, information technology, and staffing firms reported increases in customer demand. Many also said they are asking existing employees to do more instead of hiring new workers. A semiconductor firm, for example, said its productivity gains off-set the cost of merit raises for workers.
The Fed said the region’s manufacturing sector reported considerable strength, with companies “somewhat more upbeat’’ than in the beginning of the year. Makers of auto parts, semiconductors and pharmaceuticals reported improved sales, and most expected the trend to continue.
Retailers across New England said sales were slow, with some reporting “low double-digit decreases’’ from March to mid-May. Many expressed concern about the impact of rising oil prices on consumer shopping habits as well as on their own costs, including shipping. Many also cited concerns about steep price increases for raw materials, including cotton, dairy, grains, meat, produce, and nuts.
Commercial real estate markets improved modestly, the Fed reported, while residential real estate markets remain weak.
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