June 23, 1971
Reports of leading businessmen and bankers indicate the recovery is continuing but at a slow pace. The outlook has turned mixed, after being optimistic. One Alabama businessman describes the economy of his area as continuing a slow, barely perceptible growth. Another businessman reports growing uneasiness about the sluggishness of recovery. Yet another speaks of a more confident atmosphere. Announcements of plant expansions continue, but a few plant closings and sizable layoffs have cropped up. Construction is strong, with some exceptions.
On balance, there is little vigor in manufacturing. Some companies in Tennessee are reported to be operating on only a four-day week, and even then inventories are piling up. An Alabama industrialist reports that manufacturing is the "weak spot" in the Alabama economy. A north Florida banker, who has been reporting strong economic gains in his vicinity, now describes activity as being on a plateau.
There have been a number of layoffs and plant closings in recent weeks. Between 500 and 750 workers have been idled by an aluminum company, reportedly because of stockpiling before the recent labor negotiations. A textile mill employing 1,000 in Alabama is scheduled to close, but an effort is underway to try to find a buyer to take over the operation. About 300 workers are being laid off in Alabama because a vending machine manufacturing operation is closing. A spinning plant in Georgia has idled 200 and is anticipating another 200-man layoff, allegedly because of air pollution problems and foreign competition. An engineering firm in Tennessee is laying off 120 workers because of reduced aerospace research and rising costs. On the other hand, it has been reported that some firms that did not recruit at the University of Tennessee in the spring are planning to return this fall.
New plant announcements have been slow but steady. They include an electric motor plant in Mississippi, a carpet dyeing and finishing plant in Georgia, a mobile home plant in Georgia, a plant to manufacture leisure wear in Tennessee, and three plants to separate sulfur from oil produced in Alabama and Florida. Several plant expansions are occurring at a variety of businesses in Tennessee.
Outside of manufacturing, there are signs of economic strength. South Florida tourist business is vigorous. Long distance calls and telephone installations in Alabama are increasing strongly. Air traffic has picked up in the Tampa area. Retail sales are generally reported good, with one merchant noting that consumers have started to charge more of their purchases, presumably an indication of increased consumer confidence.
Construction activity is generally reported to be strong. Jackson, Mississippi, for example, is experiencing a high level of activity, and two large motel complexes have been announced recently. A shortage of skilled labor is anticipated in that area. A large residential and industrial complex has been announced for an area northeast of Atlanta. The northern Gulf Coast of Florida is experiencing a motel and condominium building boom. Residential construction is brisk in the Auburn, Alabama, area. Builders there are planning to construct speculative houses in the $23,000 to $27,000 class because they are moving much faster than homes in the $35,000 to $45,000 class. Another residential recreation project is going to be built on a lake in east central Alabama. A $15 million condominium is planned for St. Petersburg. Counter to the generally favorable construction news, condominiums are reported to be overbuilt in south Florida, and construction is reported to be at a very low level in Lake Charles, Louisiana, where some announced projects have not as yet commenced.
Two prominent businessmen report growing concern over the inability to lick inflation.