Report Pegs Economic Outlook in Region as “Neutral on Average”
The warm and dry stretch of weather that Massachusetts experienced from late summer into the fall caused a serious drought and concerns about drinking water supplies, but it’s also being blamed for sluggish economic activity.
The Federal Reserve Bank’s latest Beige Book, a summary of national and regional economic conditions and trends, said economic activity across most of New England “was down a bit on balance in this reporting period, driven in part by unusual weather patterns that delayed seasonal goods purchases.”
One clothing retailer told the Fed that it saw a sharp decline in business this fall “as sales of cold-weather apparel came in well below expectations” as temperatures remained well above average until late November. The weather pattern was also blamed in the Beige Book for the fact that “snowmobile sales were down sharply from the same period last year.”
Despite the dry fall and as more winter-like weather settles across Massachusetts, the Fed reported that New England retailers “were optimistic that more seasonable weather would contribute to firmer sales for the holiday season.”
Between the start of dry conditions in August and mid-November, all regions of the state except Cape Cod and the Islands saw an 8- to 11-inch rainfall deficit, the state said as it declared a “critical” drought, and many areas recorded their lowest rainfall ever for this time of the year.
The Fed’s latest report on intel gleaned from business and banking contacts in the region pegged the economic outlook here as “neutral on average, but sentiments were quite mixed, and many contacts expressed elevated uncertainty concerning the direction of the economy.”
