Regional Economic Update
By Chad Wilkerson
The Tenth District economy continued to grow moderately in
the fourth quarter of 1998, although weakness persisted in several sectors. Construction
activity remained strong, and holiday retail sales were better than expected. But district
manufacturers continued to have problems, and energy activity declined again as oil prices
reached new lows. The farm economy was mixed; grain producers began receiving a hefty
government aid package, but hog prices plummeted and farmland values fell for the second
straight quarter.
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Survey
of Tenth District Manufacturers
By Ricardo C. Gazel
Manufacturing activity in the Kansas City Federal Reserve District was
practically flat in January, according to a quarterly survey of manufacturers across the
district. The small positive change last month represents a marginal improvement over the
last two surveys, as production was flat in October and declined in July. The survey takes
a snapshot of manufacturing the first month of each quarter by asking plant managers
about a variety of manufacturing indicators (Table 1).
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Survey
of Agricultural Credit Conditions
By Michelle Beshear and Russell L. Lamb
Agricultural credit conditions in the Tenth District weakened somewhat in the fourth
quarter of 1998, according to a survey of 314 district agricultural bankers. Government
payments approved late in the year supported many producers' balance sheets and softened
the affect of poor prices on farm income. District farmland values fell again, though less
than the previous quarter. Farm interest rates continued to fall, and farm loan demand
continued to weaken. The loan-deposit ratio fell from last quarter's all-time high. Loan
repayment rates continued to slide, but the availability of funds at district agricultural
banks increased slightly.
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The
Impact of the Brazilian Crisis in the Tenth District
By Ricardo C. Gazel and Chad R. Wilkerson
The recent economic turmoil in Brazil, triggered by the devaluation in January of the
"real" (Brazil's currency), has understandably created concern about how the
United States will be affected. This article looks at the possible impacts in the Tenth
District and finds that, at least for now, there is little need for concern. The article
is divided into three sections: an explanation of the crisis and its overall potential for
harm, a brief discussion of the direct impact on district producers, and a more thorough
analysis of the indirect ways a spread of the crisis could affect manufacturing and
agriculture in the region.
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Economic Indicators
The actual Economic Indicators tables from this issue of the Regional Economic Digest
are not available because data have been revised. Regional
Economic Indicators are available and updated monthly by research staff.
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