rage book

Somewhere near Boston, a garden hose manufacturer is struggling. And the Fed is on it.

December 4, 2013
December 4, 2013

The Fed’s just-released anecdotal update on the state of the US economy—the Beige Book—painted a relatively rosy picture. It indicated that the US economy expanded at “at a modest to moderate pace from early October through mid-November.” The report, which comes a couple weeks ahead of the Fed’s next meeting, spotlighted ongoing strength in consumer spending, manufacturing and residential real estate. But it wasn’t all sunshine and puppies.

The Beige Book is prized for its random mentions of oddball economic indicators from around the Fed’s 12 districts. Past Beige Books have noted such regional oddities as the 15,000 cars “irreparably damaged by storm surge at the Port Newark–Elizabeth Marine Terminal in northern New Jersey” last fall. Back in January, the Boston Fed thought it worth noting that “sales of frozen fish continue to be weak.”

The latest bout of quirkiness can be found in the section authored by the Boston Fed. It implies that the garden hose may be headed for a world of hurt.

Only one of the ten firms contacted this cycle reports falling sales. A plastics firm indicates that its core bulk chemical business is slowing— “coming in for a landing”—and its retail garden hose business is “the worst in memory.”

Apparently the hose business has been something of a dog for a while. Earlier this year, specialized plastics business Tekni-Plex unloaded its Swan Hose garden hose business. The reason? At the time, Moody’s analysts wrote that, “historically, the hose business has been a drag on credit metrics and management’s time and energy.” A few weeks back, the private equity firms that took control of Tekni-Plex as part of a restructuring in 2008, sold it.

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