Beige Book Report: Atlanta
April 14, 1976
Improvement continues in the Southeast, except for some parts of the construction industry. Branch directors find the region strengthening steadily. Sales of automobiles and trucks continue to grow rapidly. Businesses serving vacationers continue to provide major boosts to the region. Changes in lumber demand and prices are occurring. Possible shortages are perceived in parts of the steel industry. Despite some improvement in condominium and mobile homes, the construction industry's condition remains mixed.
Branch directors' comments indicate steady improvement and a generally optimistic outlook; diverse indicators are cited to support this view. A Jacksonville director notes that the recession seems to be disappearing and that air cargo shipments are up. Another states that optimism remains strong and cites a 30 percent increase in advertising outlays over last year. A director from Miami finds steady, if not vigorous, improvement supported by record consumer spending; he notes a 53 percent growth in tonnage at Dade County Seaport, with increases from last year in all classes of goods. A New Orleans branch director cites increased industrial development activity in Mississippi as a sign of an improving business climate, but a second director notes a wait-and-see attitude on the part of central Louisiana businessmen concerned about the strength and duration of the upturn. Birmingham branch directors cite strengthening in textiles and apparel, increasing industrial expansion, and extremely good truck transportation business as indicators of continued improvement. As evidence of a continuing steady recovery, Nashville directors note continued gains in March retail sales in connection with new shopping centers and downtown area renovation.
Motor vehicle sales continue to grow rapidly throughout most of the Southeast. Auto sales increased sharply in February and March. Weak sales of imported models and strength in sales of full-size and luxury domestic models also persisted. Substantial gains from last year, as well as a confident view of the future, are widely reported. Truck sales have been equally vigorous. Recreational vehicle sales have increased, according to reports from Alabama and Florida.
Tourist attractions continue to lead the Southeast's recovery. Nashville's "Grand Ole Opry" is completely sold out through November. Motels on the east coast of Florida are completely full, and tourist businesses are "booming." Miami is also enjoying an exceptional season. Gains in attendance at central Florida tourist centers continue, and advance bookings are heavy. Vacationers are reportedly less budget conscious this year, and expenditures per person have risen.
Developments in industry include a leveling of demand for all kinds of lumber, reflecting the completion of inventory rebuilding by lumber yards throughout the country. Prices remain firm but are no longer increasing; they remain near the high of late 1973 and early 1974. Another report expresses concern regarding sharp price increases which are likely to result if timber harvests from national forests are curtailed as a result of environmental restrictions imposed by legislative and judicial bodies.
A firm which services offshore oil wells fears that continued production increases in autos and other steel-using industries may cause a recurrence of shortages of pipe and other tubular goods. Inventories are being increased. An executive with a major steel company expects steel products to be on allocation by the middle of the third quarter. A new steel mill nearing completion in the Jacksonville area will provide a partial offset to steel shortages. The electric furnace mill will begin production in midsummer of steel billets and by yearend expects to start manufacturing reinforcing bars. About 200,000 tons of steel products are expected to be produced annually.
Conditions in the construction industry appear to have brightened somewhat. Single-family home building and sales remain the major area of activity; with some exceptions, nonresidential construction is sluggish. Slight improvement is noted in Nashville's condominium market. In the Miami area, condominium sales have shown little change in the past 3 months, but the first sign in 3 years of reduced inventories has appeared. Apartment vacancy rates have stabilized or declined in several areas. Mobile home sales show a varied pattern. In one area of Florida, sales are still falling, while elsewhere, sales have increased. Rising sales of mobile homes in Alabama are attributed to customers' inability to afford conventional housing. Financing of mobile home sales is creating difficulties as a result of banks' unfavorable loss experience.