Most businessmen and bankers report stable or improving business conditions and sentiment. Confidence is distinctly stronger than it was a year ago, yet appears to be building gradually. Reports tend to indicate that increased credit availability is having a desired effect and that economic strength is spreading to nonresidential construction and manufacturing, including plant and equipment spending. Retail sales and tourist expenditures are, reportedly, holding up well. Very little comment has been made about Phase Two controls. The areas of greatest inflationary pressure continue to be Florida real estate and utility rates.

An increase in the availability of financing is evidently responsible for an announcement of plans to begin construction on a large hotel in downtown Nashville later this year. This project had been held up earlier by high interest rates and a lender's demand for use of the first two floors of the building. Previously postponed capital improvements at the Birmingham airport have recently been given to go-ahead, and capital improvements will soon begin at the New Orleans airport. Moreover, a large shopping mall is being planned for the Birmingham area.

Residential construction is reported to be booming along the northeast Florida coast, where several large condominium projects are planned or under construction. Strength continues in the Orlando area, where construction has begun on 1,600 apartment units. Disney World has also announced further plans for a second-home community near Orlando. Northwest Florida also reports great strength in residential construction. A planned unit residential complex has been announced for a tract north of Atlanta. Construction on this project is expected to be completed in five to eight years.

Our directors describe manufacturing activity in middle Tennessee as "strong", with one major firm working overtime, and unemployment in east Tennessee as "very low". The University of Tennessee reports that the employment picture for graduates may be showing signs of improving. During the first academic quarter, the number of organizations interviewing on campus is expected to increase to 271 from last year's 232. However, another director reported that, while business is good in Alabama, one should not expect unemployment in many parts of Alabama to be significantly reduced. Still, there have recently been employment increases at scattered apparel plants in Alabama and other southeastern states. An apparel concern that has about 8,000 employees in Alabama has recently announced major capital expansions, including two new plants. Elsewhere, plant expansions have been announced in meat packing, chemicals, and auto manufacturing.

Retail sales are generally reported to be holding up well. Tourist business in Florida is booming. Disney World is in the process of hiring 1,300 youths of high-school and college age for Easter and summer work. Ringling Brothers Circus is going to build a permanent circus complex costing $50 million about thirty miles southwest of Disney World.

Land speculation is reported in North central Florida, where property is turning over at a rapid pace and at skyrocketing prices. The TVA has warned of a possible future electric rate increase, and a Georgia power company will request higher rates later this year. Commercial bankers express concern about the profit squeeze caused by the combination of large time deposit increases and weak loan demand, but no new reductions in time and savings deposit rates have been detected.