Managers continued to trim inventories as fears of reduced exports and increased imports heightened after the Brazilian currency devaluation in mid-January. Inventory cutbacks were not as sharp as in the previous survey, but many managers remained unsatisfied with current stock levels and plan to keep trimming over the next few months. Housing Construction activity eased slightly last month due to colder weather, but starts were still well above year-ago levels. Home sales also weakened a bit in February, pushing inventories of unsold homes slightly higher. New home purchases continued to outpace last year, however.
Builders expect strong expansion of construction activity over the next three months.
Mortgage demand remained flat in February, dropping slightly below year-ago levels. Small increases in interest rates may have helped slow both refinancing activity and new home purchases. Banking Bankers report that loans increased while deposits fell last month, increasing loan-deposit ratios. Demand increased for consumer loans, home equity loans, commercial real estate loans, and agricultural loans. On the deposit side, demand deposits, NOW accounts, and large time deposits all decreased slightly.