5th District - Richmond

Regional Federal Reserve Banks

The Fifth District economy weakened further in June and early July. Commercial leasing activity also weakened across most markets, with little new construction expected, while demand for temporary workers was weaker. Manufacturing activity declined overall, though exports showed further growth since our last report. In contrast, commercial lending activity was seen as stable, on balance, with mixed reports across markets in the District. Retailers and manufacturers noted further input price increases, but had uneven results passing the additional costs through to their customers. View full report.

Finance

Contacts in Washington, D.C., Charlottesville, Va., and Charlotte, N.C., reported further tightening in credit, especially for projects in real estate-related industries.

Real Estate

Commercial real estate conditions continued to weaken across most of the Fifth District. Contacts in Washington, D.C., Richmond, Va., Charlotte, N.C., and Columbia, S.C., reported that leasing activity for office space had subsided, with a Greensboro, N.C., agent adding, "things are sluggish for everyone." Demand for retail space was mixed. Contacts in Charleston, W.Va., and Raleigh, N.C., noted a slight increase in activity, but conditions were "bleak" in Washington, D.C. Vacancy rates were mostly firm and rental rates were generally unchanged. Contacts in the Washington, D.C., and northern Virginia markets, however, reported owners accepting offers lower than asking prices, while office rental rates were up slightly for new space in Raleigh, N.C. No major construction was announced recently, and agents reiterated that clients were having difficulty financing new projects.