Fed Reports Solid Economic Outlook in S.E. Florida Market

According to the Federal Reserve’s Beige Book Report released last week, the business outlook in Southeast Florida remained strong through January and February.

Financial conditions in the region remained stable, while delinquencies remained near historical lows through February, reports said, noting deposits were strong even in Hurricane Katrina-affected areas.

There were additional reports of slowing in residential Florida home loan applications. Most reports indicated continuing tight labor markets. In patricular, studies noted labor shortages in the construction industry, especially in coastal areas.

Further Florida home loan and real estate information from the study included:

• Reports from Southeast Realtors noted a deceleration in both new and existing home sales, while most home builders reported new home construction was similar to year-ago levels.

• Condominium development showed signs of weakening as several developers put projects on hold because of soft pre-sales or escalating construction costs, reports said.

• Commercial development remained at modest levels, but most contacts reported improving conditions and steady absorption rates.

• Manufacturing activity picked up in late January and February for most sectors, although reports said weakness remained for textiles and domestic-branded auto producers. Defense, building products, and transportation-equipment producers reported stronger activity.

• Merchants in the region reported strong sales, suggesting results during late January and February benefited from people redeeming holiday gift cards.

• Rebuilding and people replacing lost and damaged items continued to boost sales near hurricane-damaged areas, reports observed. Southeast retailers said they expect modest sales growth over the next several months.