On balance, the region's manufacturers are planning to increase capital spending. Firms indicated that expansion is required to produce for current orders and for expected increases in orders for their products. Retail Third District retailers reported sales in February well above the level in February last year, despite snowstorms that impeded shopping on several days. Cold weather for most of the month boosted sales of winter outerwear, helping clothing and department stores to reduce stocks of these items without price markdowns. Overall, inventories were described as appropriate for the current rate of sales.
Merchants generally expect sales to continue moving up.
They say early indications are that spring merchandise, especially clothing, will be popular with consumers. Auto dealers generally reported a steady rate of sales in recent weeks. Inventories appear to have risen a bit above dealers' planned levels, but dealers expect broader manufacturers' incentives to underpin a high sales rate in the months ahead. Finance Bankers in the Third District generally described loan growth as slow in February. Lending to businesses was rising as commercial borrowers continued to seek loans for working capital and expansion.