STRICTLY BUSINESS: SOME `BAD NEWS' OFFSETS `GOOD NEWS' IN THE AREA

"Sales at department stores and clothing outlets sag."

"Retail sales down in October."

"Sluggish spending by debt-heavy consumers."

"Holiday sales expected to be down."

The doom and gloom stories relating to national retail sales during the final quarter of 1995 aren't reflected as much in the Eighth Federal Reserve Bank region, which includes the Cape Girardeau area.

There are some exceptions, but overall, the district economy continues to grow at a moderate pace.

Retail sales were up during the holidays -- slightly better than 1994; residential construction slowed slightly during the past couple of months, but multi-family construction picked up, non-residential construction is a bright spot throughout the district, and a survey of small companies reveal they expect business conditions to improve the first quarter of the new year.

These findings were among those revealed in the latest "Beige Book" summary that highlights economic developments in the Eighth District of the Federal Reserve.

With headquarters in St. Louis and branches in Little Rock, Louisville and Memphis, the Eighth District includes eastern Missouri, all of Arkansas, west Kentucky and Tennessee, southern Illinois and Indiana, and northern Mississippi.

Some plants continue to close -- Tri-Con in Cape Girardeau -- retail sales in some areas are slow, and a few employee layoffs have been reported. But overall, the economy over the seven-state region continues to grow.

Much of the bad news has been offset by good news -- plant expansions, new hiring and sales gains, says Joe Elstner, who prepares the Beige Book for the district.

The book, said Elstner, can best be described as a "collection of views compiled from various business and community leaders throughout the district."

A "snapshot" of the economy

It is not an in-depth report, Elstner said, "but it gives a good snapshot of the economy."

Business leaders provide information confidentially, knowing that it helps check the pulse of the regional economy. The information in turn helps the Federal Reserve Bank of St. Louis and the Federal Reserve System to determine monetary policy.

Beige Book information can be accessed through the Federal Reserve Economic Data electronic bulletin board. FRED can be reached with a personal computer and modem at (314)-621-1824.

The latest summary, released last week, indicates the district economy continues to grow.

In a survey of more than 250 businesses throughout the district, most foresee little change in economic activity over the first half of 1996.

Retail sales, an area of big concern, grew in the most areas of the district at a moderate pace in September and October and increased in November and December, with increases averaging 3 to 6 percent over the final two months. Some retailers reported double-figure increases over a year ago.

Of course "severe discounting" was reported by some department stores.

More than half of the seven state district's auto dealers reported fall sales levels below those of 1994. But most dealers anticipated an increase in sales in early 1996.

Only four of the district's 12 metropolitan areas report building permit levels above last year's.

Non-residential construction continue to be a bright spot for most areas of the district, with Cape Girardeau and Columbia, Mo., and Little Rock experiencing the strongest nonresidential construction.

Continued growth in sales

Construction in Cape Girardeau will mark the second biggest year in history.

Multi-family construction -- duplexes and apartment buildings -- has increased in Little Rock.

Tunica County, Miss., where riverboat casinos have fueled much growth in the last few years, has recently noted that new construction is down, but one new casino project is still working 24 hours a day in efforts for a 1996 Grand Casino opening.

Many manufacturing companies report continued growth in sales and don't expect any severe downturns in early 1996.

Downturns, however, are being seen in some areas. One apparel company in the district closed two plants and scaled back production at a third, resulting in the loss of more than 1,000 employees. Another apparel company is closing three plants, which will affect 700 people. In all these cases, slack demand and fierce foreign competition have been blamed.

The Southern Illinois mining industry will shrink again as three more mines close, eliminating 700 jobs.

But tight labor markets are reported in many areas, leading some companies to lure employees from other companies.

Reports from Memphis, St. Louis, Cape Girardeau and Tunica County in northern Mississippi relate many instances of "help wanted" signs.

More than 75 percent of the companies see no changes in their employment levels over the next three months.

Employment rates in Cape Girardeau County typical hover between 3 and 4 percent, and in adjoining Perry County, rates range between 4 and 5 percent, both well under the national rate, which was about 5.5 percent in October.

Economy creating jobs

The national economy, according to U.S. Labor Department reports, has created more than 100,000 each of the past two months.

Service industries continue to create jobs, more than 50,000 a month nationally. Other new job opportunities have been reported in the health industry, finance and real estate.

The labor department also reveals other statistics -- average hourly earnings are at $11.59, up 3 percent form 1994 totals, and the average work-week is at 34.7 hours.