Beige Book Report: Atlanta
May 14, 1975
According to reports, some district industries continue to slide but an increasing number appear to be expanding production and employment. Housing remains weak, but some improvement has been noted. Auto sales have fallen off since the rebates have ended. The agricultural picture has suffered from flooding conditions in Alabama, Mississippi, and Louisiana. Credit demands of farmers have also eased substantially, partly as a result of a sharp reduction in cotton acreage. A wave of new commercial and industrial projects appears under way, according to latest reports.
Scattered layoffs continue to retard the expected recovery in the district. The Reynolds alloy plant in Alabama has laid off more workers. Normally, 5,500 workers are employed; now, only 1,100 are working there. Other recent layoffs have been centered in Tennessee industries. A General Electric plant (manufacturing air conditioners), the Oak Ridge Y-12 plant, and a large bicycle manufacturing plant have all reduced their work forces.
But more and more district industries seem to be cranking up production and employment. A large Alabama shipbuilding company will need 1,500 skilled workers because of a large backlog of contracts. Dupont plants in Chattanooga and Nashville, Tennessee, are calling back large portions of the workers laid off last winter. The callbacks are the result of the improvement in demand in fibers produced at these plants. A Wilson sporting goods plant, also located in Tennessee, earlier reported to be closing down, has received new orders and is now operating full time. The president of a textile company reports that they are on the upswing again. He notes that for them, the recession started to bottom out in March. Inventories at mills and at the retail level are low, and retailers are beginning to place orders. Reports from north Georgia's large carpet industry also indicate that there are signs of revival. Local mills are cranking up second and third shifts again. According to these reports, the turning point came in mid-February when workers started being recalled. Even southern lumber mills, probably hardest hit by the housing slump, are beginning to reopen, according to industry spokesman.
Some other industries have continued to operate at near capacity through the recession. The phosphate industry is still booming in Florida, as the demand for phosphate, chemicals, and fertilizer gets larger. Tourism remains unbelievably strong in Florida, Alabama, Louisiana, and Tennessee tourist sites. Birmingham's U.S. Steel plant continues to operate at full production; despite a 22 percent sales decline, the plant is now rebuilding depleted inventories.
Reports from Alabama indicate that the housing tax credit program has helped home sales. Other cities which have recently recorded pickups in home buying are Atlanta, Jacksonville and Winter Haven, Florida, and New Orleans. The Miami housing market remains bleak, according to reports. One director indicates that the housing tax credit has done nothing for home sales in his area. Several bankruptcies of apartment complexes and mortgage companies in the Florida area have occurred in recent months. Savings inflows continue to be large at most of the district savings and loans.
In all six district states, auto sales are off since the rebate program ended. Used cars are selling well and also small foreign cars. Winter Haven, Florida, and Montgomery, Alabama, were the only cities of those reporting which had sales increases. Mobile home sales have also picked up in the Winter Haven area.
Farm prospects took a sharp blow in Alabama, Mississippi, and Louisiana, where farmers, already suffering from earlier rain-delayed plantings, were hit by floods and rains that drenched their land in April. The cattle market is still depressed, but recently cattle prices have increased a few cents a pound. Cotton acreage is expected to be about one-third lower this year than last year throughout the district. The acreage will be shifted to crops such as soybeans and corn, which require less operating capital than does cotton. Reports from district bankers indicate that, in general, this decline in cotton acreage will reduce farm loan requests.
After falling for several months, the number of new commercial and industrial projects seems to be on the upswing once again. Citizens Mortgage Corporation of Birmingham, Alabama, has arranged $3.5 million in financing for the construction of two five-story office buildings in downtown Birmingham. Plans for two new hospitals have been announced for Montgomery, Alabama, and a civic convention center is also being built. A large $70 million commercial and entertainment complex has been announced for Miami. A $100 million shopping mall-multipurpose complex is planned for Jackson, Mississippi. New nuclear generating units are planned south of Miami and in Louisiana. Louisiana is receiving a large number of new industrial plants, as well as announcements of expansions. Largest of these is a $35 million plant in Donaldsonville to make ammonia.