Reports from businessmen and directors continue to point to a softening in the economy, easing of most shortages and faster delivery time, sluggishness in pre-holiday sales, and some price reductions. Plant closings and layoffs are reported from many parts of the District, with the textile industry most severely affected. Directors in the Birmingham area still rate inflation as the country's number one economy problem, however. Despite all the gloom, some favorable signs were noticeable, with several announcements of new industrial projects, as well as strong possibilities of new business contracts for some District firms. The latest crop reports are mixed, but the picture is generally better than that of a year ago.

A recent meeting of leading District businessmen indicated that in most areas, business has weakened substantially. As reported last month, the situation in the lumber industry is bleak. There has been a 30- to 40-per cent decline in lumber prices. Many lumber mills have closed down, and concern was expressed whether they would ever reopen if and when construction activity picks up. Retail representatives reported that people are now more sensitive to bargains than they have been in nearly 30 years. The items moving best are necessity and utility items, not luxury goods. Both retailers present at the meeting expect a good toy season; the sales declines will be in adult items. The representative for one of Atlanta's largest shopping centers indicated that the retailers who rely heaviest on credit sales are now having trouble. Apparel sales are reported as very weak. An apparel manufacturer indicated a softening in bookings after seven straight years of increases. Fall sales were disappointing, and Christmas sales are turning out equally bleak. He reports that bookings for spring are terrible; this appears to be the situation for most apparel manufacturers. Textile mill business is also off substantially. One businessman noted that only about 6 of 35 Georgia textile mills are operating frill time. Textile prices are now falling sharply. The apparel manufacturer stated that by the middle of next year, apparel prices will be below this year's prices. An executive for a large soft drink company indicated that the surge in sugar prices and consequent product price increases have not severely affected their unit sales. He thought that the current pricing policy in the food industry was based on anticipation of price controls. In other words, food retailers are hedging in order to be in the most favorable price situation if controls should be enacted. This soft drink representative also indicated increases in slow payments of accounts receivable, particularly by large supermarket chains.

Reports of letups in shortages and quicker delivery time continue to trickle in. A Louisiana businessman reports that materials are now readily available, particularly for housing materials. Steel may be still in short supply; but, even in the case of steel, a Tennessee steel executive believes that inventories were built up in anticipation of a prolonged coal strike. He indicates that some steel inventory liquidation is now taking place at a price less than the original purchase price. Another Louisiana businessman said that past slow deliveries and rapid price increases on hard goods, hardware, and plastic items because of shortage conditions have ended. Some suppliers are now reducing prices to entice the wholesaler to purchase. A representative of a large oil company, however, indicated that they were still experiencing difficulty in ordering steel pipe, fittings, valves, structural steel, and electrical supplies.

The textile industry, as mentioned above, heads the list of plant closings and layoffs. Two carpet mills recently closed their doors in North Georgia; two carpet mills in Chattanooga have also closed. A yarn-spinning plant has closed down in Columbus, Georgia. Chemical plants have also been laying off workers. A Knoxville, Tennessee, plant furloughed 300 workers. Nashville's Dupont plant recently laid off 250 workers. This plant makes dacron, which is used by the slumping textile industry. Union Carbide recently announced a layoff of about 300 workers at a plant in Oak Ridge, Tennessee. Magnavox (electrical equipment) has laid off 1,400 employees in plants in Tennessee and North Carolina.

All the economic news wasn't bad, however. Central Florida's sagging economy will get a much needed shot in the arm, as Occidental Chemical Company increases phosphate production to meet domestic and foreign demands; 3,325 new jobs will be created. It is also estimated that 5,540 supportable new jobs will be created by the company's expansion. Lockheed-Georgia's future is looking up. The Marietta, Georgia, plant may move into full-scale production of the C5A cargo transport if the deal with Iran goes through. South Alabama is experiencing an oil boom. They anticipate the discovery of some 15 to 20 new oil fields over the next 5 to 10 years. Several new and expanded plant announcements were made. U. S. Steel Corporation is pouring another huge sum, estimated at $100 million, into its Fairfield works in Birmingham, Alabama, to help supply the south's steel market, now recognized as the fastest growing in the nation. The Atomic Energy Commission gave the go-ahead for construction of a $445 million nuclear power plant in St. Charles Parish, Louisiana.

Latest crop reports are mixed. Mid-November saw the first weighing in of the burley tobacco crop in Tennessee; the yield per acre was up 75 pounds from last year. Tennessee's cotton crop prospects are very gloomy this year, but corn harvesting is at a normal pace. Louisiana's agricultural production, going into November, indicated a drop in cotton and sugar cane, while rice and soybeans remained unchanged.