ST. LOUIS—A November survey found that slightly less than half of business contacts in the Memphis Zone of the Federal Reserve Bank of St. Louis expected economic conditions to improve in 2015.
The information was published Dec. 19 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.
The Memphis Zone includes northern Mississippi, eastern Arkansas and western Tennessee. It has a population of approximately 3.1 million people, including the 1.3 million who live in the Memphis metropolitan statistical area (MSA).
Paced by healthy gains in transportation and manufacturing employment, growth of nonfarm payroll employment accelerated modestly in the third quarter of 2014 in the Memphis MSA. For the second consecutive quarter, manufacturing employment rose strongly in Mississippi (3.6 percent), outpacing the nation’s growth by a sizable margin.
In contrast with the nation, the Memphis Zone’s unemployment rate ticked up from 8.4 percent in the second quarter to 8.5 percent in the third quarter. Labor market conditions remained the strongest in the Jonesboro, Ark., MSA, as evidenced by brisk job growth and the lowest unemployment rate (6.1 percent) in nearly six years.
Residential housing market conditions were mixed in the third quarter. In the Memphis MSA, the pace of house price gains slowed, but single-family building permits rebounded sharply from the previous quarter. Housing market conditions were weaker in the Jackson, Tenn., MSA but stronger in the Jonesboro MSA. The Memphis MSA commercial real estate market remained vibrant in the third quarter.
The pace of deleveraging among households in the Memphis Zone slowed markedly in the third quarter. Auto, mortgage and credit card delinquency rates edged lower.
Most Memphis bankers expect that loan demand in the fourth quarter will be little changed compared with a year earlier. On the bright side, loan quality at Arkansas and Tennessee commercial banks improved substantially in the third quarter.
Rice production in Arkansas and Mississippi increased by roughly 37 and 49 percent, respectively, in 2014.
View the entire Memphis Zone report at http://research.stlouisfed.org/regecon/burgundybooks/14/12/BB1214Mem.pdf.
The next Burgundy Books will be released March 24, 2015.