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Atlanta: March 1973

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Beige Book Report: Atlanta

March 14, 1973

Businessmen and bankers expect a robust expansion of economic activity to continue. A boom appears to be developing in commercial construction. There is upward price pressure on autos and furniture and construction materials. Scattered shortages of construction and manufacturing workers are reported.

In the past month, plans for a large number of hotels and motels have been announced. Among the largest projects are a 31-story hotel for Atlanta, a 33-story hotel for Nashville, and a 19-story hotel for Jacksonville. Two new budget motel firms have sprung up in Atlanta with plans to build six motels in various locations in the District. A luxury motel chain has also been founded in Atlanta; its first project will be a motel near Orlando, and additional projects are planned in three other District locations. In addition, there have been several announcements of smaller motels.

There is much other prospective commercial construction. Announcements include: a twelve-story bank building in Jacksonville, an $18 million airline company facility in Atlanta, twin ten-story towers in Tallahassee, a $12 million civic center in Huntsville, a $100 million commercial-residential project in Jacksonville, a $4 million office building in Atlanta, a $3.5 million office building near Clearwater, and four shopping malls.

Announcements of residential construction projects continue to be relatively few. Accommodations for up to 22,000 residents will be built within Disney World. A $6 million condominium is planned for Jacksonville. However, residential construction contractors are worried about labor shortages and rising prices of materials and land. Because of a gas shortage, a brick producer in Tennessee had to cut production, and normal delivery delay has now extended to sixteen to twenty weeks. A scarcity of concrete blocks and lumber is reported. One Florida real estate dealer fears a "condominium crash" because of over building.

Announcements of new plants and plant expansions continue brisk. A Tennessee banker reports that businessmen are being less conservative about capital expenditure projects, and new-plant inquiries are at the highest level in three years in Tennessee. A $24 million newspaper plant will be built in Tampa. A tire company is expanding its plant in Huntsville, and three new industries are planning to locate there. There have been several announcements of relatively small plants that will manufacture building materials and shoes.

Retail sales are reported to be strong, and many retailers are expecting a banner year. One auto dealer in Tennessee said that inventories are scarce. He reports that popular models are selling at sticker prices or even above and that dealer profit margins should double this year. In order to get cars, one dealer offered to buy thirty luxury cars from another dealer at $750 per unit above dealer cost. A furniture dealer reports strong consumer demands have pushed up prices and strung out deliveries. Newspaper and radio advertising revenues in the Nashville area are described as "remarkable". Some tourist areas are looking for a robust 1973. Some national chain stores are reportedly reluctant to increase prices and are willing to shave markups.

A few aerospace and defense-related layoffs have been announced, but labor shortages continue. Construction and manufacturing laborers are in short supply in several areas, and hotel jobs in Atlanta are going unfilled. The job market for college graduates has picked up appreciably at the University of Tennessee and at the University of Jacksonville.