Economic activity remains robust. The outlook for commercial construction appears particularly strong, and several new major plants have been announced. There is a growing consensus among businessmen that labor shortages are increasing and that resource and material shortages are worsening, causing delayed deliveries and increased costs. Businessmen foresee little relief from labor and resource shortages.

The outlook for commercial construction continues strong. Two office buildings and a warehouse are planned in Atlanta suburbs, and a five-story bank building is to be built in Savannah. Several hospital expansion projects have been announced, and a large number of highway construction projects are planned. The State of Louisiana has announced plans to build an $18 million school of veterinary medicine. A $2 1/2 million shopping center is to be built in Tennessee, and an Atlanta area shopping center will be substantially expanded. More motels have been announced, including a
12-story motel near the Atlanta Airport, a multi-million dollar beach front facility at Pensacola, a 170-room budget motel in Nashville, and 7 Ramada Inns in various district locations. A $600,000 ice skating rink will be built in the Atlanta area.

Residential construction is reportedly strong in New Orleans, Atlanta, and Jacksonville. Four 22-story condominiums will eventually rise in north Atlanta. Costs of homes are inflating so fast in the New Orleans area that builders are unwilling to quote prices even four or five months in advance. Some builders expect residential construction to slow as the year goes on. The rate of growth of residential construction is reportedly slowing in the Orlando area.

Several major new plant announcements have been made recently, including a $30 million plus paperboard plant in Alabama, a $30 million improvement and expansion of a Louisiana chemical plant, a $20 million plant in Alabama to produce air-cooled gas engines and electric-generating sets, and a plant to manufacture electrical goods in east Tennessee. A Japanese firm that manufactures zippers is planning to locate a plant in central Georgia with eventual employment of 2,500. New clothes manufacturing plants are scheduled for Tennessee and Louisiana. A box fabricator is building four miniplants in Atlanta. A $4 million plant to build shipping containers will be built in Jackson. Two large businesses in the Pensacola area are issuing $125 million in industrial revenue bonds for pollution control equipment.

Shortages of skilled labor have been reported by firms in Louisiana, Georgia, and Florida. One Florida banker reports an increase in the number of labor disputes, with wage increases being the main issue. A telephone company executive says that his firm plans to hire 500 workers in the New Orleans area in the coming months. They expect to find it difficult to hire skilled workers and therefore, are hoping to find semiskilled workers who can be trained for higher-skilled slots. A Georgia insurance executive pointed out that the labor turnover rate in his business rose sharply last year. Textile and cement industries in central Georgia are having difficulty finding workers and are increasing purchases of productivity-increasing equipment.

Material shortages are evidently becoming more widespread. Bus companies in Atlanta, Columbus, and Macon, Georgia are having difficulty in obtaining diesel fuel. A retailing firm is limiting gasoline purchases at its south Florida stores to 10 gallons per customer because of difficulties in obtaining supplies. A heavy construction equipment manufacturer notes that many of his purchase orders to suppliers have been put on allocation and that continued expansion of the economy will, in his view, make the problem worse. A paper industry executive claims that his suppliers are trimming out marginal products in order to cut costs. A Georgia real estate developer says that materials can be obtained but only at exorbitant prices. There has been widespread flooding in the district, and a recent tornado in north Georgia did $113 million in property damage.