ST. LOUIS—In the latest survey by the Federal Reserve Bank of St. Louis on economic conditions in its St. Louis Zone, nearly half of the business contacts in August expected local economic conditions to improve over the second half of 2014.
The information was published Sept. 23 in the latest quarterly release of the Burgundy Books, a publication of the St. Louis Fed. The reports offer comprehensive economic information for each of the St. Louis Fed’s four zones: St. Louis, Little Rock, Ark., Louisville, Ky., and Memphis, Tenn.
Paced by a sharp increase in durable goods production, manufacturing employment increased by 2.1 percent in Missouri in the second quarter. In contrast, manufacturing employment in Illinois declined by 1.6 percent. However, both states registered sizable increases in manufactured exports in the second quarter.
In the St. Louis Zone, which includes 71 counties in eastern Missouri and 45 counties in southern Illinois, the unemployment rate averaged 6.6 percent in the second quarter, down sharply from the previous quarter’s average of 7.2 percent. Nonfarm payroll employment growth picked up modestly across most of the zone’s metropolitan statistical areas (MSAs), led by a 2.7 percent increase in the MSA including Springfield, Mo.
The St. Louis Zone represents a total population of approximately 5.6 million people, including close to 3 million who live in the MSA including St. Louis.
The pace of residential construction activity in the second quarter slowed in most areas. In particular, building permits fell sharply in the MSA including Jefferson City, Mo. Similar to national trends, however, multi-family construction activity remains vibrant. In the St. Louis MSA, the commercial office market showed signs of improvement in the second quarter. Vacancy rates continued to trend downward as office employment grew.
Household balance sheets improved across the zone in the second quarter, as mortgage and credit card delinquencies fell significantly and balances continued to contract.
Missouri and southern Illinois banks registered an increase in profits (return on average assets) in the second quarter and a drop in nonperforming loans. Roughly one-fourth of bankers surveyed expected loan demand to increase over the second half of 2014.
According to projections by the U.S. Department of Agriculture, Missouri farmers will harvest the state’s largest corn crop on record, and Illinois farmers will harvest their state’s second-largest corn crop.
Read the entire St. Louis Zone report at https://research.stlouisfed.org/regecon/burgundybooks/14/09/BB0914StL.pdf.
An audio summary of the report is available at http://www.stlouisfed.org/newsroom/multimedia/audio/20140923-burgundybooks.cfm.
The next Burgundy Books will be published Dec. 19.