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

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That’s according to the latesg quarterly Beige Book report fromthe Fed. In its June the Fed noted that one-third of manufacturing companies contactee for the survey recorded drops in productionm andnew orders. Steel producers and service centersd did report that prior sharp declines in shipping volume arelevelingt off, but volume is still low. The only market showingf signs of stabilityis defense, according to the report. Manufacturers also reportesd that capital budgets have been frozen or cut back And some manufacturers are limiting expenditure to criticalmaintenance only. Most respondentsx in manufacturing reported deeper cuts in payrollsincer April.
In the real estate industry, residential construction remain weak, although builders are more optimistic than they were earlier in the Most surveyed reported increased sales activity and higher leveld offoot traffic. But builders are finding it hard to secure financintg and say that the continued credit crunch is hampering the recoveryh in thehousing industry. On the commercial real estat side, builders in public works projectr were more positive than those in other commerciak andindustrial development. Financinfg also is a problem in commercial real estate and most builders do not see conditions improvin g over the nextfew months, accordingb to the report.
In the retail responses were mixed. Retailers said they have seen no majo shifts in consumer spendinfg and said they expect little change durinvg thethird quarter. Auto dealerxs report new vehiclesales slowed, but used vehicle salews showed modest improvement. In financial institutions reported that demand for commercialp and industrial loansis mixed, with some community banker reporting that they are attracting business from regiona banks. Refinancing applications for residential mortgages remain strong, with interest rates hoverinv at low levels. Most bankers reportee increases inloan delinquencies.
Most of those loans were tied to real Production declines were reported by respondentse in the coal as electric utilities work through their excess Oil and gas production was reportefd tobe stable, despite a general slowdown in drilling In the transportation industry, shipping volumse was reported to be at low levelsx and shipments are down substantially Most transportation industry officials expectr activity to stay at currenft levels through the thirdc quarter.