The severity of the recession is beginning to ease in some regions of the country, but a return to growth won't come until at least next year, according to the Federal Reserve Board's periodic survey of business conditions, known as the Beige Book.

Manufacturing activity declined or remained at a low level across most of the Fed's districts, but several districts also reported that the outlook of manufacturers has improved somewhat. Boston, Philadelphia, Cleveland, Chicago, St. Louis, and Minneapolis reported declines in manufacturing activity, while production remained at very low levels in the San Francisco District. Atlanta and Kansas City indicated that the pace of the decline in manufacturing had moderated or slowed. New York characterized the sector as having stabilized, while Dallas mentioned signs of stabilization. In contrast, Richmond reported a rise in both new orders and shipments. Philadelphia reported that the primary metals, machinery and electrical equipment industries remain especially weak.

Several districts reported an uptick in home sales. Commercial vacancy rates were rising in many areas, while developers reported difficulty finding financing for new commercial projects. Commercial vacancy rates were rising in the Boston, New York, Philadelphia, Richmond, Atlanta, Chicago, Minneapolis, Kansas City and San Francisco districts, putting downward pressure on rents. Atlanta, Chicago and St. Louis reported new construction projects being postponed or cancelled and new construction in New York, Philadelphia and Minneapolis dropped substantially.