Contacts reporting the best sales results also noted improvement in sales to Mexican customers. One contact said that sales to Mexican shoppers were showing a pretty good resurgence, including evidence of some wholesale buying, although sales were not back to the pre-peso devaluation levels. Inventories are reported to be in good shape. Auto sales were reported to be slower than expected. Financial Services Contacts reported little change in loan demand over the last six weeks.
Outlooks remain optimistic for all loans types for the rest of the year.
Construction and Real Estate Construction activity increased modestly. Contacts in several major Texas cities reported that hotel construction picked up strongly over the last six weeks. In addition, increasingly tight office markets across the state continued to boost office rents and plans for new office construction. Demand remained strong for industrial space, but some respondents continued to report that new supply was outstripping demand. Contacts are optimistic that 1997 will be a good year for residential construction, but most doubt they will match the high level of new home construction recorded in 1996.