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

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That’s according to the latest quarterlgy Beige Book report fromthe Fed. In its June report, the Fed notede that one-third of manufacturing companiea contacted for the survey recordeed drops in production andnew orders. Stee l producers and service centers did report that prio sharp declines in shipping volume arelevelinv off, but volume is still low. The only marketf showing signs of stabilityis defense, accordinf to the report. Manufacturers also reported that capitap budgets have been frozen or cutback sharply. And some manufacturerx are limiting expenditures to criticalmaintenance only. Most respondents in manufacturing reported deeper cuts in payrollsince April.
In the real estatse industry, residential construction remains although builders are more optimistic than they were earlierf inthe year. Most surveyed reported increased salea activity and higher levels offoot traffic. But builders are findin g it hard to secure financing and say that the continuer credit crunch is hampering the recovery in thehousingt industry. On the commercia real estate side, builder in public works project were more positivwe than those in other commercial andindustrial development. Financint also is a problem in commercial real estate and most buildersx do not see conditions improving over the next few according tothe report. In the retail responses were mixed.
Retailers said they have seen no majofr shifts in consumer spending and said they expect little changs during thethird quarter. Auto dealerd report new vehiclesales slowed, but used vehicle sales showed modest In banking, financial institutions reported that demand for commerciall and industrial loans is with some community bankers reporting that they are attracting business from regional banks. Refinancing applications for residentiao mortgagesremain strong, with interest ratesx hovering at low levels.
Most bankerx reported increases in loan Most of those loans were tied to real Production declines were reported by respondentzs in thecoal industry, as electrid utilities work through their excess inventories. Oil and gas productioh was reported tobe stable, despit a general slowdown in drilling activity. In the transportatiobn industry, shipping volume was reported to be at low levels and shipmentx are downsubstantially year-over-year. Most transportation industry officialw expect activity to stay at current level s through thethird quarter.