World Business Chicago does an excellent job of summarizing the key economic indicators of the Federal Reserve’s Beige Book survey.

“Chicago District Beige Book Highlights (March 2013):

  • Growth in consumer spending decreased, and some contacts suggested that the end of the payroll tax holiday was having an increasingly negative effect. Lingering winter weather prevented retailers from selling spring-related merchandise, which drove up inventories. Regardless, sales during the Easter holiday mostly followed expectations.
  • Business spending was up as inventories increased slightly, and spending on software, equipment, and structures increased. The labor market showed modest improvement, and contacts indicated that demand for highly skilled profession and manufacturing positions continued to outpace supply. Opportunities for recent college graduates were up, and employers saw greater competition to fill internships.
  • Construction and real estate activity improved; residential construction increased as demand for multi-family housing remained strong, and single-family grew. Increases in non-residential construction remained moderate, but commercial real estate conditions improved as rents increased and vacancy rates decreased.
  • Growth in manufacturing slowed, with some contacts speculating that it was hampered by uncertainty surrounding the federal budget sequestration – however, they reported little evidence of this is their shipments. Demand for steel was flat, mining activity was down, and both the energy and heavy equipment sectors were mixed. The auto industry continued to be strong.
  • Credit conditions remained favorable, as credit spreads and market volatility remained low. Banking contacts reported increases in business, real estate, and consumer lending. Recent rises in equity and home prices were thought to be boosting consumer confidence and spending.
  • Cost pressures were mostly unchanged. Commodity prices were down, and scrap metal continued to decline. Energy prices remained elevated, and contacts noted upward price pressure on raw materials such as chemicals, lumber, and concrete. Wholesale price increases were modest, as were wage pressures.
  • Agriculture – cold weather delayed field work, but contacts doubted that planting would be seriously delayed. Corn and soybean prices dropped with expectations of larger crops this year. Milk and hog prices were down as well, while cattle prices remained unchanged.:”

Keeping up to date on macro and micro economic trends is a critical element of any space occupancy strategy.