Commercial building activity likely to see a pickup but energy-related projects remain sidelined
January 2017 - The Federal Reserve Bank of Atlanta, based on its latest economic survey, found that most respondents in the Southeastern commercial real estate market saw improving demand, while the majority of commercial contractors indicated that the pace of nonresidential construction activity had picked up from a year earlier. Most commercial real estate brokers anticipate the pace of nonresidential construction activity to increase slightly during early 2017.
Manufacturing new orders and production levels in the region moved higher than the previous two-month period. Supplier delivery times lengthened and purchasing managers indicated that finished inventory levels decreased. They also cited a notable increase in commodity prices. Respondents were more optimistic about business activity going forward, as almost half indicate they expect an increase in production levels over the next six months, compared with only one-third in the previous survey.
At ports in the Atlanta Fed district, break bulk cargo, container and automobile shipments strengthened, while trucking contacts saw declines in tonnage. Liquefied natural gas projects were under way while other petrochemical projects that had been scheduled for 2016-2017 were delayed into 2018 and beyond. Energy industry respondents indicate that oil and gas producers will proceed with prudent capital investment plans. Renewable projects continued to expand in the region, particularly wind energy. Oversupply of crude oil and gasoline continued, which perpetuated high demand for inventory storage.
