Construction is also expanding in the Chicago, Minneapolis, and Kansas City Districts, but it has slowed in the Dallas District. Both office and industrial space is scarce in the Richmond and Atlanta Districts. Contacts in most Districts expect activity in commercial markets to continue at a high level, but predict possible further slowdowns in residential markets due to higher interest rates. Agriculture and Natural Resources May rains reportedly improved crop prospects in the Cleveland, Richmond, and Chicago Districts. By contrast, drought-like conditions continued in most of the St. Louis, Kansas City, and Dallas Districts, where the dry weather damaged winter wheat and created poor forage.
Pastures are also dry in Arizona and Oregon.
In a few areas, scarce forage has spurred ranchers to start culling their herds. Surveys in several Districts indicate that farmers' financial conditions have improved, with gains in farm values and incomes and debt repayments. Contacts in Kansas City and San Francisco noted that crop prices remain low, while those in Minneapolis and San Francisco mentioned rising wages or turnover for farm labor. Activity in the energy sector has improved. Atlanta, Minneapolis, Kansas City, and Dallas all cite sharply increased rig counts in response to low inventories, strong demand, and higher energy prices.