June 13, 1973
The District's economy remains robust with no letup in sight. There continue to be numerous announcements of new plants and plant expansions. Plans have been announced for several large real estate projects, but there are some reports of impending weakness in residential construction and some doubts that all of the planned major projects for Atlanta will actually be built. Tight labor market conditions are common, especially in Florida.
A large flow of new plant and plant expansion announcements continues throughout the District. Firms in the chemical industry have announced plans for a $90 million phosphate processing plant in North Florida, a $50 million polyvinyl chloride plant in Lake Charles, a $50 million plant expansion in Nashville, and a $21 million synthetic resin plant near Mobile. Chrysler Corporation is planning to locate an assembly plant employing 1,000 in South Georgia. A multimillion-dollar tire fabric plant, which will eventually employ 300, is to be built in North Alabama. Firms in the electrical products industry have announced plans to expand an air-conditioner plant and to build a thermostat plant and a new air-conditioner plant, all in Tennessee. A dictation equipment plant is slated for Central Georgia and an electrical tool plant for Jackson, Mississippi. There is also a possibility that a major investment will be made at an engineering center in Tennessee. Lumber products companies intend to build two new plants in Georgia and three others in Alabama, Mississippi, and Louisiana. Three apparel plants in Mississippi and Alabama are being expanded, generating from 300 to 400 new jobs.
The outlook for residential construction is mixed. There have been some noteworthy announcements, including two planned unit developments covering a total of 2,600 acres near Orlando, a $28 million residential development in Jacksonville, and a 1,000-acre residential development north of Atlanta. An Atlanta firm has bought 5,500 acres north of Daytona for eventual development of a "recreational-oriented residential community." There has been a multimillion-dollar land deal in the Florida Panhandle involving thousands of acres, but no definite plans have yet been announced. There are some reports of weakness in residential construction, however. In some areas such as East Tennessee, this is the result of labor or material shortages or weather conditions. Five-month delays in brick delivery are reported in East Tennessee. One Tennessee banker notes that the "increasing cost and the diminishing supplies make it difficult for contractors to bid on projects." A low supply of labor and a shortage of concrete and plywood are reportedly slowing construction in the Jacksonville area. Construction activity in the Miami area is expected to slow after a rush to beat a permit moratorium ordered by a pollution control board.
Plans for another 30-story office building and parking facility have been announced for downtown Atlanta. However, because of the large number and the ambitiousness of many of the planned Atlanta projects, real estate people have begun to express skepticism that all the projected developments will actually be built. They note that, in the past, projected developments have sometimes been scrapped because of a lack of sufficient financing. On the other hand, the occupancy rate in metropolitan Atlanta area office buildings has reportedly risen to 87 percent and the rate is even higher in moderately priced space in downtown Atlanta.
Plans have been announced for a $200 million shopping center and office complex in a planned community southwest of Atlanta and for a $50 million office park north of Miami. On a smaller scale, plans have been announced for a $7 million hotel complex in Augusta, Georgia, a $4.5 million addition to a motel in downtown Atlanta, a $3 million shopping center in Northeast Florida, and a $2.1 million retail office building in South Atlanta.
Taut labor market conditions are reported in some areas of the District. The unemployment rate is less than 2 percent in some areas of Florida. One businessman claims that a shortage of labor is an impediment to attracting new firms to the Tampa area. The citrus and vegetable industries in Central Florida report difficulty in attracting sufficient harvesting labor. In Tennessee, overtime in the lumber, machinery, and metal products industries has kept unemployment so low that a Knoxville businessman complains that "It is still virtually impossible to find anybody to work." An exception to these conditions exists in areas of Louisiana where layoffs in manufacturing, reportedly due in part to a lack o£ raw materials, have pushed up unemployment.
There are reports of increased real estate speculation. In Tennessee, where land prices are "booming," people are acquiring land which was considered "wasteland two or three years ago." A Tennessee banker claims that older people compare the current situation to the speculation of the late 1920s. In the Cape Kennedy area, house prices have reportedly fully recouped from the depressed levels of 1970. The average cost of used homes in the Atlanta area has risen sharply.
Paid attendance at the tourist attractions in Florida, particularly Disney World, has increased. Attendance during the first seven months of Disney World's second year has been running 8 percent ahead of the comparable period last year. However, people in the tourist industry are worried that the gas shortage will diminish the current volume of tourism.
Farm costs are reportedly rising sharply because of the high price of seeds and feed and shortages of fuel and fertilizer.