The District's economy appears to be showing some signs of slowing down from its recent rapid growth pace. Reasons for the slowdown are energy and materials shortages and declines residential and commercial construction resulting from high interest rates and overbuilding in some areas. Although announcements of new commercial projects and new or expanded plants continue to pour in, there is growing evidence that some of these projects may be delayed or canceled because of energy and materials shortages. Bumper crops are reported in some parts of the District.

According to Directors and businessmen, the energy shortage is beginning to have an impact on the District's economy. TVA announced that coal supplies are running low at several steam plants. The present stockpile is only 19 days rather than the preferred 90-day supply; anything below a 60-day stockpile calls for emergency measures. The shortage of diesel fuel is intensifying TVA's coal shortage. A recent cutback on allotments of diesel fuel means that barges which deliver about one-third of TVA's coal will not be in operation. TVA estimates that the energy loss from the non-delivery of coal is about 300 times that saved by the cutback in diesel fuel. This demonstrates the need for a more rational allocation of fuels. In Louisiana, a gas supplier has implemented cutbacks on natural gas supplies to its electric utilities and industrial customers in several southern states. As a result of this curtailment, 32 of 39 sugar mills in Louisiana will be without natural gas this fall, and a substantial part of this year's sugar cane crop may rot in the fields. The energy and fuels shortages are also causing a scarcity of nitrogen-based fertilizers. According to one Director, this means a shortage of food and high food prices next year. There seems to be a definite choice between suffering some cold this winter or a shortage of food next year. Two major airlines in the District, Eastern and Delta, have announced plans to cut back operations 5 percent and 3 percent, respectively, to save fuel.

The energy shortage, along with the past high level of building activity, has caused delays in the completion of many construction projects. Plastic plumbing, a petrochemical product, is now in short supply. Builders have had to revert to cast-iron plumbing. One Director indicated that plans for a new paint plant were canceled when the manufacturer found that he could not obtain the needed petroleum products. Shortages of cement, steel, and fixtures have also stretched-out completion of a number of projects. In most cases, contractors have been willing to pay whatever the asking price was to obtain materials. According to one Director, these same contractors will be less anxious to start new products because of these shortages.

Reports from around the District indicate that both residential and commercial construction continue to weaken. Although construction on many projects continues, partially because of delays in delivery of materials, a decline in building permits in most areas indicate that further drop-offs in home building are just around the corner. The tightening of credit has also affected the District's large mobile home industry. Reports from northwest Alabama indicate that mobile home plants have been shutting down and laying off workers. In central Florida, Bible World, a proposed $11 million tourist attraction, has been postponed indefinitely because of tight credit conditions. There is evidence of over-building of motels in central Florida. The hotel-motel occupancy rate in the Orlando area is approximately 41 percent, and some of the larger hotels are running only 24 percent of occupancy. However, a shortage of apartments still exists. Disney World, which has a problem in housing its employees, is building a 900-unit apartment complex on its property in Lake Buena Vista.

A large number of commercial and industrial projects continue to be announced. Several national corporations have announced plans to locate regional offices in the Atlanta area; four new hotels have been announced for its outlying areas. Some businessmen believe the present fuel shortages and the possible reduction in traveling may force cancellation of some of these projects. As last month's report indicated, the shortages of energy and materials are stimulating some new announcements of industrial projects. The energy shortage has forced a $28.4 million expenditure by Copolymer Rubber and Chemical Corporation in Baton Rouge in order to modify their equipment for a reduction in natural gas usage. In west central Alabama, Citadel Cement Corporation plans a $50 million Portland cement plant with an annual capacity of 750,000 tons. Pass Christian, Mississippi, seems certain to be the location of a $100 million Dupont chemical plant which will eventually employ 1,200 workers.

A new twist may be in the offing for foreign investment in the District One Georgia official speculates that Japanese banks will soon be opening branches in Atlanta, and a British bank is currently in the process of establishing a branch here. A Japanese textile firm plans to build a $15 million plant in Augusta, Georgia. This will be the tenth Japanese firm in Georgia.

In agricultural news, the soybean harvest is going well; nearly 50 percent of the crop is harvested. Bad weather has reduced the cotton crop in middle Louisiana to 20 to 30 percent below last year's production. This year's Florida citrus crop is the second largest on record.