April 10, 1974
The District economy appears to be improving despite some reports of job layoffs. Both new and used auto sales have apparently bottomed out, and announcements of new and expanded plants and commercial projects are strong. But several job layoffs and strikes continue to depress certain economic areas.
Surveys of Louisiana auto dealers indicate a more optimistic attitude than in previous months. The lifting of the oil embargo seems to add encouragement to their outlook. Used car sales are apparently also starting to move in these areas. Florida directors report a pickup in sales of both new and used big cars. However, retail sales in general remain soft. Most local retailers in the New Orleans area are complaining about sluggish business. Sales tax receipts, particularly gas tax revenues, are down in the early months of 1974 from year-ago levels. However, one bank director from Louisiana notes that business seems to have picked up over the past several weeks. Tourist activity also seems to be reviving, particularly in Florida. Officials of Disney World, Cypress Gardens, and Circus World report their business is up over the past few weeks. Yet, tourist travel in Tennessee's Great Smoky Mountains National Park remains depressed.
Job layoffs continue to plague the region's economy. Most notable were an extension of previously announced layoffs of Atlanta area auto assembly plants and the temporary deferral of 1,300 workers at a Ford glass plant in the Nashville area. Because of the auto industry slump, an Alabama textile manufacturer will shut down next month. A Louisiana army ammunition plant is idling 1,200 workers through April. In central Mississippi, 1,500 workers will be temporarily unemployed, resulting from the slaughter of several million chickens contaminated by pesticide tainted feed. This is a severe blow to that local economy and particularly to poultry producers who will suffer several million dollars in losses. Several large strikes in Alabama, Mississippi, and Tennessee have also temporarily idled several thousand workers. On the brighter side, regionally based airlines are beginning to hire back previously furloughed employees.
The volume of plant announcements appears to once again be on the upswing. A $25 million electric steel mill, which will use recycled autos and other steel scrap, is planned for Jacksonville. Ashland Oil has announced plans to build a town of approximately 45,000 people, a refinery, and an offshore oil port near Florida's Atlantic Coast. The refinery should generate 1,000 jobs. Related businesses are expected to create between 8,000 and 10,000 jobs. In Jackson, Mississippi, the expansion of two plants will add 200 new jobs. Alabama appears to be in the race along with Mississippi and Louisiana as the location of a $600 million refinery on the coast after the refinery was voted out of New Hampshire. Several chemical plants may soon be announced in this area. While new and expanded plants were being announced, some other plans to build plants have apparently been shelved. The Florida Department of Commerce reported that 14 companies suspended plans to build plants there because of the energy crunch.
Oil and gas exploration is intensifying in the southeast. Florida Power and Light Company and Amoco Production Company have announced a $10.5 million joint oil exploration venture in 26 south Florida counties. At the same time, Florida Gas Company has made a gas discovery in south central Mississippi.
Spending for pollution control is becoming an important ingredient of the region's capital spending plans. According to the Alabama Water Improvement Commission, in 1973, 27 industries constructed water pollution control facilities in Alabama valued at $19.5 million. In 1974, announced plans are for 40 different industries in the State putting nearly $28 million in new pollution control facilities into operation. In Tennessee, $10 million in bonds to finance additions to the environmental protection facilities of a large paper manufacturer have been approved. A Meridian, Mississippi, manufacturer has announced that it is investing $600,000 in new equipment and facilities for pollution abatement and increased efficiency.
Numerous commercial projects were announced. A team of Houston, Texas, and Sidney, Australia, developers will start construction this May on a 114-acre planned residential and commercial city near Atlanta costing $50 million. Another $75 million multipurpose commercial project has also been announced for Atlanta's south side. Several smaller commercial projects were announced in the Baton Rouge, Louisiana, area.
Atlanta bankers have indicated a strong interest in the new issue of $1.5 billion of U. S. Treasury notes paying 8 percent. They expressed fears of losing funds from checking and savings accounts as small investors draw down these accounts to purchase these Treasury bills. One other bit of news, the refinancing of New Orleans' Superdome in the approximate amount of $138,930,000 came to market and found no bidders. The primary reasons noted were (1) the
6-percent legal limitation on interest rates for public entities in the State and (2) the high inventory of municipal bonds on the shelves of banks and investment houses in a very depressed bond market.