On the other hand, reports from St. Louis and Minneapolis point to further deterioration. Contacts that do see improvement in the situation don't expect it to come until at least the second quarter, and many expect it to be only slight at that. The year-end surge in business loan demand has held over into 1982 in most districts, but some bankers interpret that as a sign of weakness on the part of borrowers. Many firms are borrowing to finance unwanted inventory accumulation. Some cutbacks in credit extension may be anticipated, as banks are becoming more and more concerned with the creditworthiness of their customers.
Consumer lending remains weak across the board.
Deposit flows are mixed. The response to IRA plans has been sluggish in most districts, despite heavy promotion in some parts of the country, and banks that have experienced a strong demand for IRA deposits have often found very little new money going into them. Real Estate and Construction. The residential housing market is universally depressed, with the worst conditions indicated by Philadelphia, Richmond, San Francisco, and New York. Only houses in the highest price brackets are selling.