May 17, 1972
With few exceptions, Sixth District businessmen and bankers report strong economic expansion and an optimistic outlook. A citrus industry executive describes Florida's economy as "busting out all over," and a Tennessee banker indicates that economic conditions in his area are "very strong and the mood of the people is great." "Full employment" conditions are claimed in Atlanta and parts of Tennessee and Florida. However, talk of inflation seems to have subsided somewhat.
Nonresidential construction appears to be strengthening, and residential construction remains strong. Downtown Jacksonville is reported to be a maze of sidewalk barricades because of a near tripling of construction activity in the past three years. A building boom is also reported in Birmingham, and a $30-million coliseum is being planned on the Mississippi Gulf Coast. Plans for a new city of 80,000 have been announced for an area 25 miles west of New Orleans. A 7,400-acre development-with an eventual population of 37,000-is being planned near Palm Beach, Florida. A $25-million motel condominium project has been announced for Florida's Northwest Gulf Coast. Construction has been so great at two areas near Orlando that they have declared moratoriums on multi-family construction in order to study density and site plans and to update zoning maps. A Tennessee director claims that construction is so strong in his area that that any farmer with a saw and hammer has become a general contractor.
Announcements of new plants and plant expansions continue at a moderate pace. For example, a $50-million plant owned by Playtex Corporation has recently been announced for East Alabama. A nuclear reactor component plant under construction in Pensacola is being expanded. This plant is reportedly booked solid through 1975 and is taking orders for delivery as far out as 1981.
In many areas of the District, unemployment is reported to be nearly nonexistent. An Atlanta director adds that output per manhour has held up well and job turnover has been low compared with other periods of full employment. Some directors have been suspecting that the unemployment statistics are inflated. One notes that workers receiving unemployment insurance have been working as day laborers on farms and taking wages only in the form of cash. Two hundred engineers are being transferred to the Mississippi Gulf Coast because of a high level of shipyard activity. However, unemployment is reportedly high in New Orleans and Lake Charles, Louisiana.
Retail sales are reported strong. Sporting goods are particularly in strong demand. A Central Tennessee boat manufacturer indicates that he does not have sufficient space to produce boats on order. The Nashville recording industry is reportedly experiencing a 25-percent gain over last year. Earlier this year, Disney World's projected 1972 attendance was raised from 8 to 10 million, but actual attendance is running at a higher rate. Attendance at other Florida tourist attractions is up strongly.
A sample of three New Orleans consumer finance companies indicates loan demand trends from "steady" to "down slightly." All companies polled report that collections have been good and that the downward trend in loan demand "would probably be with us for a few more months." All reported interest rates down slightly, reflecting the lower demand level. One expressed the opinion that consumer borrowers are still uncertain of Phase II controls, as evidenced by the decline in income tax borrowing this year. One company expressed surprise that the improvement in delinquency ratios in recent months has not yet been followed by an increase in loan demand.
There have been few reports of inflationary psychology despite tight labor markets and some bottlenecks in construction. A shortage of cement is reported in several parts of Florida. An executive of an Atlanta plumbing supply firm indicates that Atlanta's construction industry is pressing against capacity. A small hospital in Florida reports that it incurred sharp cost increases when renewing service and maintenance contracts recently. There is also reported to be a shortage of small farm machinery.