New fed study finds mixed conditions in LR

Arkansas Business, March 24, 2008 by Gwen Moritz

The Federal Reserve Bank of St. Louis, long famous for its "Beige Book" of economic conditions in the region, released last week its first-ever "Burgundy Book," a quarterly report of detailed economic data for the Little Rock area.

The conclusion in one word: Mixed.

"Economic conditions in the Little Rock zone were mixed," the report begins. "The residential housing markets remained sluggish, but commercial and industrial real estate markets have remained relatively robust. Problems in the housing sector have shown signs of spilling over into banking, with a softening of loan demand reported. The consumer spending outlook was mixed. Manufacturing employment has been expanding somewhat, while service sector employment has weakened. Agriculture and natural resource extraction have generally been bright spots in the Arkansas economy."

Among the specific findings:

* A third of general retailers and half of car dealers indicated that sales were down in January and early February as compared with last year, while one-third of each group said sales were up.

* Little Rock area home sales in 2007 were down 15 percent from 2006, and January sales were off 13.5 percent from the same month in 2007.

* Through November, year-to-date commercial construction projects were up "more than twofold" from the same period a year earlier.

* Banking conditions in the Little Rock zone deteriorated in the first quarter of 2008, when "nearly all contacts reported continued softening in demand for consumer loans." However, bank deposits were unchanged.

* The total value of field crops in Arkansas rose 32 percent from 2006 to 2007.