Economic recovery throughout New England is on a slow, but steady uptick, according to the latest Beige Book released Wednesday by the Federal Reserve.
Commercial real estate markets in the First District, which includes Massachusetts, Connecticut, Maine, New Hampshire, Rhode Island and Vermont, are maintaining a solid footing, according to the report. Rents on prime retail properties and office rents in Boston are steady or rising, while office leasing volume is steady in Hartford. Investment sales demand for multifamily properties in the Hartford area is still strong, and investor interest in well-leased office buildings in the area is increasing.
Single-family home and condominium sales rose throughout the First District in May, the Fed said, with contacts reporting strong demand for housing, particularly in urban areas. The Fed’s contacts expected slight increases in interest rates to spur more buyer activity in the short term, and low inventory levels in Massachusetts, especially in the Greater Boston area, are putting upward pressure on prices.
The retail and tourism industries saw slight increases during this period as well, with contacts in the tourism business attributing their increases to strong corporate business travel and entertainment. Domestic leisure travel remained soft, however, which the Fed attributed to record-setting rainfall in New England during June.
Only one manufacturing contact, a manufacturer of electric motors and brakes, reported a decline in sales, for which it could not pinpoint any specific reason. That firm was also the only one of the Fed’s manufacturing contacts to report significant staff reductions.
And while the overall picture the Fed paints in this latest Beige Book is modestly optimistic, the Fed wrote in its report that it expects gun manufacturers in Connecticut to vacate the state after the passage of its new, stricter gun control laws, following the lead of one such firm that recently announced plans to relocate to South Carolina. Such a mass exodus would likely move jobs out of the state and vacate a significant amount of commercial space.
