Fed says Midwest manufacturing 'stable'

March 5, 2008
Growth in the Midwest manufacturing sector was stable in January and February, the Federal Reserve Bank of Chicago reported today in its Beige Book report.

Manufacturers tied to aircraft, cranes, energy extraction and mining flourished, the Fed said. Steelmaking, aided by the low price of the dollar, was close to full production. However, makers of appliances and other products that depend on housing continued to see soft demand.

Overall, the Midwest experienced slow economic growth, with consumer spending slowing but business spending largely unchanged.

Credit conditions continued to deteriorate. Demand for business loans remained strong but consumers curtailed borrowing as lending standards tightened. A burst of refinancing in January cooled in February.

Manufacturers said costs for metals, cement and other materials increased. Except in construction and retail, the costs are being passed on to customers.

Across various industries, respondents said pressure to increase wages was mild other than for highly skilled workers.

The report is issued eight times a year based on interviews and other means of gathering information on economic trends. The area of the Midwest included in the Chicago district includes Iowa and most of Indiana, Illinois, Michigan and Wisconsin.
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