Beige Book Report: Atlanta
December 8, 1971
An improvement in business sentiment has occurred during the past six weeks, at least among businessmen located in areas of the District that have usually been relatively prosperous. For example, most attendees of a recent meeting of Nashville business leaders agreed that pessimism has been exaggerated, and that business was not as bad as it has been made out to be. A Tennessee director claims that optimism in his area is greater than at any time in tile past few years. Directors representing north and central Florida described prospects, especially in the construction and real estate field, in glowing terms. Some businessmen doubt the efficacy of Phase II because of the large wage increases granted by the Pay Board.
Despite recent reports of overbuilding in some sectors, construction activity is reportedly showing strength. A rash of new developments has been announced around Orlando, including a residential-commercial development valued at $50 million and another valued at $20 million. Total real estate activity is running about 100 per cent above last year's level in the Orlando area, mainly because of Disney World. There have also been several announcements of large residential-commercial developments in the Tampa area, including a $16 million condominium and two shopping centers costing a total of $3.2 million. For the third time in the past year, a large parcel of land along the north Florida Gulf Coast has recently changed hands. A residential development is being planned for the site. A $43.5 million loan has been secured for the completion of the final stage of hotel-office-condominium-apartment complex in downtown Atlanta. A large planned residential community has been announced east of Atlanta, and planned communities are reportedly under consideration for two areas southwest of Atlanta.
Construction activity is evidently benefiting from an abundant supply of mortgage money. Executives of two life insurance companies claimed that they are having a difficult time finding investment opportunities, especially because the demand for mortgage money for commercial construction has been weak. They also report that real estate investment trusts are beating the bushes for opportunities to place funds.
The employment outlook has improved. Disney World will add 2,000 workers by Christmas, 1,100 more than originally planned. A tire plant in central Alabama has recently added 200 workers. Directors from two areas in Tennessee report that unemployment is negligible.
Plant announcements continue at a modest pace. New chemical plants will be built in Vicksburg and Baton Rouge. Construction of a large seafood packing plant in Brunswick, Georgia, has begun. A life insurance company is setting up regional headquarters in Jacksonville, and two national concerns are reportedly interested in locating in the Jacksonville vicinity.
Two wage settlements have come to our attention since the end of the freeze; they call for first-year raises of 9 and 11 per cent. The portion of the raises above 5.5 per cent is evidently being held up, pending Pay Board action.
The outlook for the citrus industry has reportedly never been better. Although a good crop is expected, demand has been so strong that the carry over of frozen orange juice concentrate from last year's bountiful harvest is small.