July 21, 1971
Businessmen and bankers generally report improving economic conditions. The short-run outlook is modestly optimistic but, underlying this, there remains some deep-seated concern about the fundamental health of the economy and the ability to control inflation. Construction continues to be the leading sector, although two large projects have been delayed and one canceled. Manufacturing continues to gradually increase, except for primary metals and aerospace. Tourist trade is reported strong in several areas. A lengthy longshoremen's strike is expected to start on October 1.
Construction activity is reported to be strong in most areas of the District. In Baton Rouge, residential construction is occurring at a record pace and two office buildings have been announced. A construction boom is continuing in Tampa, with shopping center construction leading the way. Residential construction is also reportedly leading an economic upturn in South Florida. Construction activity is reported at a fast pace in most parts of Tennessee with one businessman claiming that it is difficult to obtain bids from contractors because of the high level of activity. A large refrigerated warehouse has been announced for Atlanta. On the other hand, financing difficulties are blamed for delays in two large projects, and another proposed project has been canceled. A "new city" previously announced for Central Tennessee has been stalled by an inability to obtain adequate financing. Construction of the New Orleans domed stadium is being held up because there were no bids on the stadium bonds. The bonds have been readvertised and bids, if any, will be opened on August 11. If the bonds sell on that date, construction will be delayed only three weeks. Any further delays in the project could jeopardize the stadium as presently planned, because the Louisiana legislature has set a ceiling cost of $129.5 million for the stadium. A $100 million plus hotel-office complex planned for downtown Atlanta has fallen through.
Manufacturing activity is reported to be improving. An auto parts producer is reported operating near capacity as is a pleasure boat manufacturer. Furniture producers report greater than anticipated sales. Farm machinery is also moving well, partly because of large exports. Primary metals and aerospace remain weak, however. The aluminum industry has reportedly laid off 1, 200 in the past month. Steel production is considerably below capacity. A subcontractor for the aircraft industry and an aerospace research firm have both laid off workers in Tennessee. Five hundred have been idled at an automobile assembly plant in Atlanta, evidently because of switches in model mix and a return of normal production after the post-strike period.
New plant announcements continue at a modest pace. A plant to liquefy and store natural gas and a water meter manufacturing plant will be built in South Alabama. A plant to manufacture gas heaters and air conditioners for recreational vehicles is planned for Central Tennessee. A plant to manufacture mobile homes and another to manufacture wearing apparel have been announced for Tennessee.
The tourist season is reported to be strong in the mountain areas of Tennessee and in most of Florida. Motels along Florida's north Gulf Coast are reportedly booked for the remainder of the summer. Occupancy rates along Florida's Gold Coast are high.
One New Orleans banker reports that he expects delinquencies to increase slightly in the coming months. Collections remain a problem, particularly because of bankruptcies. Also, a Tennessee banker thinks that farmers are overextending their credit to buy machinery in order to avoid farm labor difficulties.
A longshoremen's strike is expected to start along the Gull Coast on October 1 and last for 60 to 75 days. The union is reportedly asking for a one-year contract that would raise base pay from $4.50 to $7.50. Work over 30 hours would receive time and one-half, and six more holidays are requested along with increased employment security benefits.