Economy

Fed Beige Book: Economic activity up slightly, manufacturing unchanged

March 7, 2024

Economic activity across the US increased marginally from early January through the end of February, according to the latest Beige Book report from the US Federal Reserve.

The Fed’s economic report, published eight times each year, said eight of 12 districts saw slight-to-modest growth in overall activity since its previous report. Three districts – Atlanta, Kansas City, and New York – saw no change in activity, while one district – Philadelphia – saw a slight softening.

The report said activity in the manufacturing sector was largely unchanged, adding that “supply bottlenecks normalized further.”

The report noted a slight increase in steel demand in the Chicago district, “in part because of a rebound in auto production following the UAW strike.” Additionally, steel orders for industrial buildings remained solid.

Some contacts in the Cleveland district “indicated that seasonal patterns and customer demand were less predictable than those prior to the pandemic, and one manufacturer explained that ‘erratic [customer] demand’ was ‘part of the post-Covid landscape.’”

Of note, the report said: “Ongoing shipping disruptions in the Red Sea and Panama Canal did not generally have a notable impact on businesses during the reporting period, although some contacts reported rising pressures on international shipping costs.”

While commercial real estate activity was said to be weak, some districts saw strong demand for new data centers, industrial and manufacturing spaces, and large infrastructure projects.

Moderating mortgage rates caused an uptick in residential real estate demand, but low inventories hampered actual home sales in the period.

Nearly all districts reported improvement in labor availability and employee retention, with employment rising at a slight-to-modest pace.

“Price pressures persisted during the reporting period, but several districts reported some degree of moderation in inflation,” the report said, noting a decline in the cost of manufacturing and construction inputs, including steel, in recent weeks.

There are expectations for more robust demand and less restrictive financial conditions over the next 6-12 months, the report noted.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.