June 14, 1972
Businessmen and bankers generally agree the Sixth District's strong economic expansion will continue through the rest of this year and into next year. One of our Tennessee directors expressed the majority opinion in the following: "Most individuals feel optimistic not only about current conditions but about business in general for 1973. They point out problems caused by an increase in the minimum wage; they are aware of the dangers of inflation; and they know uncertainty caused by a possible change in administration must be considered. But, in spite of this, they are confidently planning for an increase in their business in 1973." However, a minority of businessmen feel inflation has not been checked and will accelerate in 1973, to be followed by restrictive economic policies.
Recently, there have been several announcements of major new plants. The most noteworthy is a plant that will build offshore nuclear generators. This facility, eventually expected to employ 10,000, will be located in Jacksonville, Florida. An auto producer has plans to construct a plant in Jackson, Mississippi, that will make electrical components for autos. A major shipbuilding and repairing firm will build an elaborate facility in Tampa. Tampa Harbor is also receiving a new phosphate terminal. A southeast Alabama director reports that during the last 60 days plant announcements have picked up noticeably. In that area, plants will be built to produce such diverse products as charcoal briquettes, ceramics, garage doors and truck beds. There have also been a number of new plants or plant expansions in construction-related businesses, such as cement, lumber, composition board and lighting fixtures. In addition, several firms recently announced large capital appropriations for plant modernization and pollution control. Tennessee is reportedly receiving inquiries from a number of foreign countries concerning locating or purchasing plants in that state. A major electronics firm is locating its first "mini-plant" in Atlanta. This facility will hire about 20 people and will produce a variety of products, emphasizing speedy delivery and individual attention.
Retail sales, especially of consumer durables and autos, have been strong. One department store reports a sharp increase in purchases on time, an indication of strong appliance sales. Auto sales are reported good in several areas. A large Atlanta retailer recently announced it intends to open a store in Birmingham. A nationally known furniture retailer plans to build a combination warehouse and distribution center in Jackson, Mississippi. A slight downturn in loan demand at two New Orleans consumer finance companies has not turned out to be as significant or as long-lasting as earlier thought.
Commercial vehicles and farm machinery are selling very well, and there is a shortage of heavy-duty trucks.
The growth of residential construction may be slowing. Only one major project has been announced recently and Birmingham's apartment market is approaching the saturation point. However, a surge of commercial building is expected in Atlanta.
Drought has damaged corn, soybeans and other crops, and if adequate moisture is not forthcoming soon, damage will become severe. The pine bark beetle has infested timber in some areas of the district. Infested timber must be harvested quickly, at increased cost and then used only for pulpwood.
A telephone company executive has warned a steady increase in phone rates will be necessary if services are to be expanded rapidly.