Beige Book Report Shows Turnaround Months Away

Washington, DC, March 4, 2009--Business people see more pain ahead, expecting no improvement in economic conditions till late this year at the earliest.

The Federal Reserve's latest Beige Book report showed sharp cutbacks.

From factories in Cleveland to high-tech firms in Texas and California, the Fed's report showed widespread production declines.

"National economic conditions deteriorated further," the Fed's survey concluded. "The deterioration was broadbased, with only a few sectors such as basic food production and pharmaceuticals appearing to be exceptions."

Looking ahead, business people rated the prospects "for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010."

The survey summarizes information from businesses and others supplied to the Fed's 12 regional banks.

The Fed survey said there were "steep declines" in manufacturing activity in some sectors, and "pronounced declines overall."

Hardest hit were factories that make goods related to the housing industry. Construction-related equipment and materials, such as primary metals, wood products and electrical equipment, saw especially steep drops in production. So did makers of furniture and cars, the report said.

Factories are getting hit by slower demand at home as well as overseas, where foreign customers are coping with their own economic troubles.