March 25, 1981
Cautious optimism characterizes the attitude of the business community at this time. There is renewed confidence that the economy may be making a gradual turnaround. Auto sales are up, and home builders report increased customer activity. Factory payrolls and hours are accelerating. Prospects for agricultural income have brightened.
Consumer Spending and Inventories
Retail sales have been holding
their own at best. Consumers continue to be selective. They are
taking advantage of sales and are limiting impulse buying. A chain
store executive indicated that a renewed promotional effort would be
required to "get sales moving." Credit card sales have dropped off
as consumers resist incurring additional debt. Delinquencies are
decreasing in all areas. Merchants' inventories were well balanced
in most cases.
Auto dealers report that rebates are generating new car sales. Many potential new car buyers had deferred purchases because of the high sticker prices of the 1981 models. The auto dealers hope that customer enthusiasm will continue into spring, normally a strong season for new car buying.
Financial and Construction
Residential building contractors are
also looking to spring for strong sales. Customer traffic has been
heavy lately, and several real estate firms have added employees to
their sales staffs. Repair and alterations to existing residences
have picked up. There is sentiment that mortgage money will not dry
up in the near term. However, strong demand may tend to preserve
interest rates at relatively high levels. Consequently, buyers must
set aside more of their disposable income for housing. Lending
institutions are beginning to relax their underwriting requirements
in response to the greater commitments of consumers.
Commercial construction has positive momentum, particularly in northern and central Florida. Financing is available, but participations and equity kickers are involved. Most previous commitments are proceeding on schedule.
Large banks reported declines in consumer loans and loans to non- financial institutions. Business and real estate loans picked up slightly. NOW volume in the District is still growing. Demand deposits are declining moderately; inflows to time deposits continued due to the appeal of money market certificates.
Employment and Industry
Manufacturing payrolls moved ahead briskly
in January on the strength of advancing factory hours and hourly
earnings. Construction materials producers are gearing up for a
strengthening sales picture. Recalls of steelworkers in northern
Alabama helped offset the impact of the closing of a large
equipment-producing plant there.
Tourism, Florida's largest industry, has been adversely affected by cold weather, publicity about violent crime in Miami, and rising air fares. Hotel, restaurant, and automobile rentals are down as much as 20 percent in south Florida. The cruise business is also down notably, and ship operators are trying to combat the problem by offering bargain rates. State tourism and industry leaders hope that an aggressive promotional campaign will bolster the state's sagging tourism industry before Easter. Visitors spent an estimated $17 billion in Florida during 1980, state records show.
Agriculture
Increased rainfall has brightened prospects for
agricultural income recently. A bumper winter wheat crop now seems
more likely. Prices of vegetables and grapefruit rose sharply in
February, reflecting reduced supplies following January's freeze.
Orange prices dropped abruptly as farmers rushed fruit to processing
plants in an attempt to avoid losses from deterioration following
the freeze. On the whole, prices in the livestock sector were stable
while feed costs, particularly hay for cattle feeding, soared.