Fed: Region's economy has weakened further - Business Courier of Cincinnati:

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That’s according to the latest quarterly Beige Book report fromthe Fed. In its June the Fed noted that one-third of manufacturing companied contacted for the survey recorded drops in production and new Steel producers and service centers did report that prior sharlp declines in shipping volume areleveling off, but volumw is still low. The only market showingt signs of stabilityis defense, accordinb to the report. Manufacturers also reported that capitalp budgets have been frozen or cutback sharply. And some manufactureras are limiting expenditures to criticalmaintenance only. Most respondente in manufacturing reported deeper cuts in payrolsince April.
In the real estatee industry, residential construction remains weak, although buildersw are more optimistic than they were earliere inthe year. Most surveyed reportec increased sales activity and highert levels of foot But builders are finding it hard to secure financing and say that the continuer credit crunch is hampering the recoveryu in thehousing industry. On the commercial real estatde side, builders in public works projecyt were more positive than thosee in other commercial and industrial Financing also is a problem in commerciaol real estate and most builderzs do not see conditions improving over the next few according tothe report. In the retaiol industry, responses were mixed.
Retaileres said they have seen no major shiftse in consumer spending and said they expect littld change during thethird quarter. Auto dealerw report new vehiclesales slowed, but used vehiclee sales showed modest improvement. In banking, financial institutions reportecd that demand for commerciakl and industrial loans is with some community bankers reporting that they are attracting business fromregional banks. Refinancing applications for residentialk mortgagesremain strong, with interest rates hovering at low levels. Most banker s reported increases inloan delinquencies.
Most of those loans were tied to real Production declines were reported by respondents in the coal as electric utilities work through theirexcesds inventories. Oil and gas production was reportec tobe stable, despite a general slowdown in drilling activity. In the transportation industry, shippinb volume was reported to be at low levelzs and shipments are downsubstantiallyh year-over-year. Most transportation industry officials expect activith to stay at currenr levels through thethird quarter.