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N.E. economic growth is modest

The outlook for New England is “generally positive” as the economy continues to expand modestly and most industries report better sales and improving business conditions, according to a Federal Reserve survey released Wednesday.

The survey, known as the Beige Book, found manufacturers reporting increased sales, health care consulting booming as the industry prepares for the Affordable Care Act, also known as Obamacare, and median prices for homes rising in most of the region.

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The report, however, found hiring subdued in most industries and wage increases remaining modest, at best.

The Beige Book, published eight times a year in advance of the Fed’s policy-making meetings, collects anecdotal information from businesses in each of the 12 districts served by Federal Reserve banks. Nine districts rated growth as “moderate,” up from seven in the last report. Only two districts, Boston and Philadelphia, said growth was “modest”; Kansas City said it ‘‘held steady.’’

Policy makers, who will consider further trimming the Fed’s stimulus measures, meet again Jan. 29-30.

Nationally, the survey found moderate or modest economic growth and increased hiring in most of the country. The report said that harsh winter weather in recent weeks had a minor impact on consumer spending, which accounts for about 70 percent of the nation’s economic activity.

In New England, the Fed survey found businesses worried about the political situation in Washington, where Democrats and Republicans are maneuvering as mid-term elections for Congress approach. Several consultants “mention some concern that Congressional decisions may yet cause a crisis,” the Fed’s report said.

One government consultant reported a drop in revenue attributed to the automatic federal budget cuts known as sequestration and uncertainty over future reductions. Most respondents, however, remained “bullish” about the future, according to the report.

Although home sales in New England were lower than year ago, real estate markets in the region experienced increased prices for single-family homes, according to the survey. The Fed said the small sales decline could be the result of low inventories, a pause after strong sales earlier in the year, or uncertainty among consumers following the partial government shutdown in October. But “New England realtors agree that 2013 has been a good year overall and they remain optimistic about sales increases,” the report said.

Commercial real estate leasing remained steady, while construction activity increased, boosting building in health, education, life sciences, and commercial sectors.

Manufacturers reported increased or steady sales.

Retailers also reported solid performances. “Demand is strong across all apparel categories, home furnishings, and items related to home improvement,” the report said.

Sean Lavery can be reached at
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