September 15, 1976
Uneven gains continue in the Southeast; the geographic areas of greatest relative strength and weakness remain unchanged. Retail sales strengthened in late summer, following earlier weakness. The improved financial position of consumers is evident in reports of lower delinquency rates. Tourist activity has been disappointing, except in Tennessee. Production increases are noted in the carpet, furniture, and apparel industries, but paper, consumer durables, and construction-related manufacturing are experiencing cutbacks. Several mining operations have been plagued by layoffs and strikes, but new construction and mining projects create a more promising outlook.
In South Florida, the economy is described as generally healthy but not robust. Pockets of recession remain in real estate. However, a general sideward movement is viewed for the most part as a seasonal slowdown. In Central Florida, a slowing of the expansion is attributed to weak tourist activity; again, a lateral movement is perceived. In contrast, Louisiana directors note continuing slow but steady progress. Ongoing improvement is also noted in Alabama. A steady rate of expansion continues in Tennessee.
Mixed feelings are expressed concerning this summer's retail sales in South Florida. Disagreement exists as to whether sales have exceeded or simply equaled those of a year ago. Only slight gains have occurred in Central Florida, but larger advances are anticipated in the fall. Auto sales are a key area of strength. In Louisiana, soft goods sales have been weak, and retailers are entering the fall season with caution. However, reports from Mississippi indicate sizable gains in merchandising. Again, automobiles are a bright spot. Alabama retailers report that weakness during most of the summer was followed by sales gains from late July through early September. Inventory levels are reportedly healthy. Tennessee retailers cite a similar sales pattern; with early weakness followed by acceleration in late summer, they remain cautious but optimistic. Auto sales continue to set records.
Strength is apparent in the do-it-yourself home improvement market. A building materials supplier reports strong sales, and lenders cite gains in home improvement loans. Loans are also being made for car repairs as an alternative to new car purchases. Delinquency rates have declined sharply.
Much of Florida's weakness in retail sales is attributed to a slowdown in tourist traffic. Occupancy rates in South Florida have declined. This slowing is attributed to the attractiveness of bicentennial observations in other tourist centers. A good winter season is expected, now that this unique seasonal influence has dissipated. Tourist trade has also been disappointing in Central Florida. One attraction notes an 11-percent decline in traffic during July. As a result, services employment in the restaurant and lodging industries has declined. Reports from Tennessee suggest that the tourist industry remains a bright spot. The opening in early September of the Georgia World Congress Center for a major apparel trade show boosted hotel occupancy and tourist-related business in Atlanta.
Industrial developments include an increase to four shifts at a Georgia carpet factory. Several Southeastern producers of linerboard and corrugated paper are reducing production because customers are cutting their inventories. A major supplier of metal products notes unusually large stockpiles of copper goods. Manufacturers of furniture and apparel are increasing their output. Lumber demand continues to be strong, with most grades selling at record high prices. An aluminum manufacturer reports operations at maximum capacity. Two comments reminiscent of 1975 find a Tennessee manufacturer of appliance timers cutting production and an industrial lighting manufacturer experiencing a slowdown in orders.
Layoffs in Florida's phosphate industry continue to boost that State's unemployment rate. Over the past 3 months, more than 1,000 workers have been dismissed. A Tennessee director reports layoffs resulting from Federal environmental regulations which caused several strip mines to be closed. Most Alabama coal mining operations were shut down by wildcat strikes which began in mid-July; over 2,000 workers have been idled. An economy move by a major electric utility in Florida has laid off 615 construction workers and 250 office personnel. Employment in Tennessee will receive a major impetus over the next 4 years. Thirty thousand new jobs are expected to result from large Federal construction projects in the energy, defense, and metals industries. A major zinc mining project has also begun in Tennessee. Additional mines and ore processing facilities to be opened at the site will employ between 600 and 700 persons. Other companies are also expanding existing zinc operations in this area. A Louisiana shipyard has received a Navy contract to construct two ships; 520 men will be employed for 46 months.