Retail sales were rising amid widespread markdowns to reduce inventories. Auto sales were steady, but off from February of last year. Bank loan volumes outstanding have been decreasing as consumer and residential real estate lending have moved down. Construction contracting continued to slip, but commercial real estate markets were firm and home sales were steady. The outlook among the business firms contacted for this report is that overall economic activity will gradually improve in the second half of the year.
Manufacturers expect an upturn by the middle of the year and modest growth thereafter.
Retailers forecast a further increase in the pace of sales as the spring selling season gets under way. Auto dealers expect the sales rate to be steady for most of the year, but below last year's rate. Bankers foresee no growth in lending until business conditions improve later in the year. Real estate markets are expected to remain firm, although construction is forecasted to ease further. Manufacturing Third District manufacturers reported that falling demand for their products had continued into February from January.