2010 Annual Report Explores Southeastern Economic Recovery
The Atlanta Fed's 2010 Annual Report explores the Southeast economy's halting recovery from the Great Recession while painting a positive picture of the future. In particular, the essay portion of the report focuses on the region's banking sector and small businesses in the recovery.
Southeast economy struggles to rebound
"Certainly, 2010 brought some encouragement, but the year was one step in what promises to be a long recovery," the report notes. Central to the Southeast's lagging recovery is the region's dependence on population-driven growth, especially in Florida and Georgia. The attendant growth in the construction and retail industries powered much of the region's economic growth in the years leading up to the recession.
Despite challenges such as the housing collapse, deep and sustained job losses, and mounting bank failures, 2010 brought modest improvements in the region's key economic sectors, including tourism, energy production, and auto manufacturing.
Banking climate challenging, diverse
Throughout 2010, the recovery in the region's banking sector continued to lag that of the nation, according to the report, which detailed a number of trends that played out in 2010, including
- Diverging performance among banks, with larger banks generally experiencing improved conditions and smaller banks facing continued challenges
- Geographic differences in bank performance, with Florida and Georgia accounting for the lion's share of southeastern bank failures
- Retrenchment in lending as banks tightened lending standards and focused on shoring up their balance sheets
The decline in lending has affected an important source of new jobs in the Southeast and nationwide—small businesses, which also were a key focus of the Atlanta Fed's research and outreach efforts in 2010. While there are varying opinions as to why banks curtailed lending, a few things are clear, says the report. First, small business lending was near record-low levels in 2010. At the same time, fewer firms were seeking credit, which may change as business sentiment picks up, however.
Online format provides interactive experience
The latest annual report marks a milestone for the Atlanta Fed, as it is the Bank's first fully navigational online annual report. Featuring photo slideshows, video remarks from Bank President Dennis Lockhart, and links to in-depth studies by the Atlanta Fed on related topics, the online annual report offers an interactive experience for readers.
May 31, 2011