St. Louis Burgundy Book: Economic Conditions Modestly Improve, But More Slowly Than The National Rate

ST. LOUIS – About half of business contacts surveyed expect local business conditions to improve during the next three months, according to the most recent edition of the St. Louis Burgundy Book released today by the Federal Reserve Bank of St. Louis.  However, 40 percent expect conditions to remain unchanged and 15 percent expect conditions to worsen.

The Burgundy Books offer comprehensive data and information on the economic conditions of each of the St. Louis Fed’s four zones: St. Louis, Little Rock, Louisville and Memphis.  The publication, which is released quarterly, includes the following sections: labor markets, manufacturing, real estate and construction, the household sector, banking and finance, and agriculture and natural resources.  Audio summaries of economic conditions in the zones are also available.

View the entire St. Louis report at: research.stlouisfed.org/regecon/burgundybooks/13/06/BB0613StL.pdf

The St. Louis region covers 71 counties in eastern Missouri and 45 counties in southern Illinois.  It represents a total population of approximately 5.6 million people, including the close to 3 million who live in the St. Louis Metropolitan Statistical Area (MSA).

According to the St. Louis report, The St. Louis zone’s unemployment rate in the first quarter remained below the national average; some parts of the zone registered unemployment rates below 6 percent. However, growth of nonfarm payroll employment trailed the U.S. growth rate in the first quarter. Employment growth in the first quarter was strong in the St. Louis MSA’s largest industry (trade, transportation, and utilities). By contrast, government payrolls posted a sharp decline in the first quarter.

Manufacturing employment registered positive growth in Illinois in the first quarter, but weakened modestly in Missouri. Benchmark revisions showed slightly fewer jobs in 2012 than initially reported.

The St. Louis residential housing market continues to recover, although the pace of building permits in the first quarter trailed the nation’s rapid growth. House prices fell slightly in the first quarter—a sharp contrast with the healthy gains seen nationally.

Net interest margins at Southern Illinois and Missouri banks continued to decline in the first quarter. In a positive development, most bankers expect loan demand to pick up over the next three months.

The March 2013 planting intentions survey suggests that Missouri and Illinois farmers intend to plant fewer acres of corn. Planned soybean acreage increased in Illinois but declined in Missouri.

To view all of the Burgundy Books, see research.stlouisfed.org/regecon/district.html.

In addition, MP3 audio clips of highlights from the Burgundy Books can be heard at stlouisfed.org/newsroom/multimedia/audio/20130613-burgundybooks.cfm. They are available in both English and Spanish. 

The remaining Burgundy Books for 2013 will be released on September 12 and December 12.