October 10, 1973
The long-term outlook of the district's economy remains strong, as witnessed by the large number of announced plans for commercial and industrial construction. Only residential construction seems to be off, particularly in Florida; but even there, several new announcements have been noted. Shortages continue to plague the region, with dual effects noted. In some cases, they have caused delays in the completion of projects, while in other cases new plant announcements and a boom in demand have resulted.
While residential construction spending may be slowing, new projects continue to be announced. Several new major residential developments are just now reaching completion in the Atlanta area. A new planned community in the Jacksonville, Florida area, which will cover 5.2 thousand acres and have an eventual population of 34,000, has been announced. A $35 million condominium complex has also been announced for the area. Plans for two new residential complexes near Huntsville, Alabama have been reported, and construction has begun on a $30 million condominium project in Panama City, Florida. Atlanta area building permits through August, however, are down over the same period last year. Mortgage rates in this area are the highest in the nation. In the Miami area, developers with projects in the planning stages are finding it difficult to raise funds. Some bankers and businessmen have reported an oversupply of condominiums in central Florida. In Tennessee, residential construction has slowed only slightly; the biggest problem noted there has been a shortage of materials which now take three to six months for delivery. In the Knoxville area, however, the tight money market has caused a 75 percent cutback in home loans at several lending institutions.
Announcements for commercial projects remain in high gear. The number of announcements in the Atlanta area continues to dazzle the imagination. The only question seems to be how many of the proposed projects will finally be built. Three new major multipurpose, multistructure complexes recently have been announced for the downtown area, ranging from $100 million to $200 million in estimated costs. In Birmingham, a new Merchandise Mart to be financed by $20 million in revenue bonds has been approved by the state legislature. In Tennessee, a new training center recently has been announced by TVA and will cost $14 million.
The energy shortage appears to be stimulating plant announcements in the district. A $200 million synthetic natural gas plant has been announced for the Jacksonville, Florida area. A $300 million petroleum refinery is on the drawing boards for the New Orleans area. Plans are under study for a $173 million clean fuels processing plant along Florida's west coast. In Pensacola, a multimillion dollar expansion of the Westinghouse Electric Corporation plant, which produces nuclear reactor components, will double its capacity. A $100 million chemical plant, which produces basic materials for the carpet and clothing industries, has been announced near Mobile, Alabama. But shortages have put a crimp in some previously announced projects. A large auto parts manufacturer was forced to delay construction of a plant near Jacksonville, Florida because of a shortage of structural steel.
Foreign investment continues heavy in the district. The Japanese announced a chemical plant to be built at Gulfport, Mississippi. Three different Japanese companies are considering the Mobile area as a site for mini-steel mills. German interests are investigating chemical plant sites in Alabama and Mississippi, while the Swiss are considering a machinery plant in these areas.
The worldwide shortages of basic materials are causing a boom in shipbuilding, the first peacetime boom in this century. The scramble for petroleum, grain, ore, and other commodities is reported as the reason for the increased building of supertankers and bulk cargo carriers. Shipyards have begun expanding their capacity to meet this new business. Both Jacksonville and Tampa shipyards are operating at capacity levels, and the Tampa yard is now planning a new dry dock.
Central Florida's phosphate mining area is booming as a result of a pickup in domestic and foreign demand for phosphate. Acute labor shortages, however, are limiting this boom. Tight labor markets exist throughout the district. Many factories are working overtime. Help-wanted advertising is up sharply in most large district cities over year-ago levels. The advance in farm prices is boosting sales in farm equipment, as farmers decide to replace older machinery. Reports from Tennessee indicate that farm machinery sales are at record levels.
There seems to be mounting concern over both economic and environmental effects of future oil drilling off Florida's Gulf Coast. One government report indicates that several air bases and a Navy base in Florida might be closed or operations curtailed if oil exploration is allowed in the Gulf of Mexico.
A large fish kill continues in the Pensacola, Florida area. Crews have been picking up 10 to 12 tons of dead fish a day. There are reports of shortages of shrimp and oysters along the Louisiana and Mississippi Gulf Coasts.