Reports from the twelve Federal Reserve Districts indicate that overall economic activity continued to increase at a modest to moderate pace since the previous survey.

Manufacturing expanded in most Districts since the previous report, with many Districts reporting increases in new orders, shipments, or production. Most Districts noted that overall consumer spending and auto sales increased during the reporting period. Activity in a wide variety of nonfinancial services was stable or increased in most reporting Districts. Transportation was stable or increased in several Districts.

Manufacturing increased in most Districts since the previous survey. The exception was Kansas City, which noted a slight contraction, with storms retarding some activity. Most Districts reported stable or increasing new orders, shipments, and production. Reports from contacts in the Cleveland, Chicago, and St. Louis Districts indicated moderate growth in manufacturing. The Minneapolis District further noted that more manufacturing firms increased activity than in the previous report; the Boston, New York, Richmond, Atlanta, and San Francisco Districts noted that the uptick was modest; and the Philadelphia and Dallas Districts noted slight improvements. Firms in the Boston, Philadelphia, and San Francisco Districts were broadly optimistic about prospects for the second half of 2013, while manufacturers in the Richmond District were cautiously optimistic; contacts expressed mixed outlooks in the Dallas District, and contacts in the Cleveland and Atlanta District do not expect future production to be as high as previously projected.

Banking and Finance

Reports on banking conditions were generally positive across the Districts. Overall loan demand increased modestly across most reporting Districts. New York District bankers reported mixed but generally steady loan demand. Some bankers in the Cleveland, Chicago, and Dallas Districts noted competitive pressures to reduce loan pricing. Bankers in the Philadelphia, Richmond, Cleveland, Atlanta, and Chicago Districts noted a shift toward new home mortgages and away from refinancing (which was led, in part, by increases in interest rates).

Reports on credit quality indicated slight to moderate improvements across the reporting Districts. Improvements were noted by the New York, Philadelphia, Kansas City, and Dallas Districts. Credit standards remained largely unchanged, although some bankers in the Atlanta and Philadelphia Districts noted increased competition to ease credit standards.

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