Business conditions in the Third District weakened somewhat from June to July. Manufacturers, on balance, reported declines in new orders and shipments. Commercial real estate leasing and construction activity have remained sluggish. Reports of increases in input costs and output prices were somewhat more common in early July than they were in June.

The outlook among Third District businesses varies. Manufacturers forecast increases in shipments and orders during the next six months, but they have become less confident of a strong recovery. Contacts in commercial real estate expect leasing and construction activity to remain soft as long as overall economic conditions are uncertain. View full report.

Finance

One lending officer said his institution was "tightening standards across the board," and another said his bank was "paring back loan-to-value ratios" for real estate lending.

Real Estate and Construction

Commercial real estate firms indicated that construction, leasing, and purchase activity remained sluggish. Rents have been steady. However, there has been an increase in the overall vacancy rate, according to some commercial real estate agents, as tenants have reduced their occupied space and offered unused space on the sublet market. Contacts anticipate that markets will likely continue to be soft while economic conditions remain unsettled.