March 18, 1992
Summary
Most sectors in the Eighth District are reporting growth. Increasing
demand for goods and services and outside firms relocating to the
District are stimulating economic activity. Construction activity
has picked up in recent weeks. Business and consumer loan demand are
showing signs of increasing. Transportation companies report a pick-
up in demand.
Manufacturing
Since our last report, both employment increases and plans for
employment increases have multiplied. For example, a major tire
manufacturer in Memphis recalled 100 workers because of rising sales
and greater-than-expected demand. A major household appliance
producer in southwest Indiana will increase employment by 200 after
a previous increase of 900 employees. An electrical equipment
company announced the consolidation of its North Carolina plant at
its Tennessee plant, which will add 150 workers over the coming
year. A barge builder in southeast Indiana recalled 200 workers.
Both an aerospace company and a plastics company chose northeast
Mississippi for their new plants. The aerospace plant, which will
produce engines for the space shuttle program, will open in 1994
with 1,000 workers; the plastics firm will begin hiring this spring.
An Arkansas electric motors company is expanding its facilities
because of increases in demand and technological advances. Also in
Arkansas, a jet engine producer is building a new plant, and a steel
company is building a new mill. A California piping company will
close its four plants and move to Little Rock, bringing 400 to 500
jobs. Another California transplant, a medical equipment maker, will
arrive in St. Louis by April, bringing 400 jobs.
Companies in some sectors, especially defense-related firms, continue to lay off workers. An ammunition equipment maker released 130 employees at two St. Louis plants. In addition, a plastics molding firm laid off 100 when restructuring plans closed the Louisville plant. A major St. Louis defense contractor laid off an additional 420 workers in January and February: however, the firm also announced that it will hire 500 engineers by year's end because of new contracts.
Nonmanufacturing
Positive news from nonmanufacturing firms also dominated the
negative news. Strong sales spurred a national discount retailer to
recall employees laid off after Christmas. Patronage at St. Louis
restaurants was reportedly up in January and February over the
previous months. Health services continue to grow with 500 new
positions added in St. Louis over the past month. In addition, a
recent temporary employment agency's report revealed that 25 percent
of the surveyed St. Louis firms plan to increase their employment
during the second quarter of 1992, with most new jobs anticipated in
the public sector and service-related industries.
Construction and Real Estate
Residential construction activity is up substantially from its year-
ago level. Although much of the increase can be attributed to the
low levels of activity during with the Gulf War, contacts say
favorable interest rates and potential tax incentives are spurring
both new construction and sales. A first-quarter 1992 survey of
small construction firms indicated that almost half believed
business conditions would improve during the next six months.
Banking and Finance
Total loans outstanding at large District banks declined slightly
over the past few months. The downturn was concentrated in real
estate, where loans declined almost 1 percent in January and
February, compared with 2.3 percent growth during the prior two
months. Commercial and industrial loans outstanding continue to
grow, rising 1.2 percent so far in 1992. Consumer loans were flat
over the two-month period, compared with a 0.5 percent decline
during the prior two months.
Agriculture and Natural Resources
Delta catfish producers report increased production and higher
prices because of the Lenten season. Mississippi cotton producers
intend to increase planted acreage this spring, while Arkansas,
Missouri and Tennessee cotton producers plan slight decreases.
Arkansas oil and natural gas producers report low prices, but lumber
producers report relatively high prices. District coal production is
off about 6 percent from a year earlier.
Transportation
Because of financial and legal difficulties, an Arkansas trucking
firm recently closed, releasing 400 employees. Meanwhile, two major
Louisville freight and parcel carriers announced plans to expand
their facilities because of increased demand. Barge movement of
nonfarm commodities in the St. Louis area has increased recently;
for example, a significant amount of cement is reported to be moving
from a Missouri cement maker into the Chicago area. Barge tonnage
through Little Rock is up substantially from last year. Passenger
movements through the St. Louis and Little Rock airports have
increased recently, while freight operations are up modestly in
Memphis.