December 2010 saw continued recovery in some important sectors of the Southeastern economy, including manufacturing and consumer spending. At the same time, the most recent data and analysis from the Atlanta Fed's Regional Economic Information Network (REIN) show continued weakness in others sectors, many of which are key to the region's overall economic recovery.
One sector that is gaining steam is consumer spending. Sales during the holiday shopping season were modest yet positive, according to a recent retail sales survey conducted by REIN. Further, Southeastern retailers expressed optimism about future sales. In December, the strongest growth in sales occurred at online retailers, health and personal care stores, and building supplies retailers, among others, according to U.S. Census Bureau data. Additionally, other segments of the consumer spending category also saw improvement, including tourism and sales of vehicles assembled in the region.
Along with the increase in consumer spending came a boost in sales tax collections, which rose 4.9 percent in the Southeast in December over the previous year. Sales tax collections have been rising across the Southeast since July. However, they are still relatively low for most states in the region, said the REIN report. The growth in sales tax collections is also boosting local government finances, according to the report. Overall tax collections were up in all Southeastern states except Louisiana, which saw double-digit percentage declines in November and December.
While there was modest improvement in some sectors, others, such as construction and real estate, remained relatively weak. District home sales were down 17.9 percent on a quarterly basis in the third quarter, according to the National Association of Realtors (NAR). Existing home sales in all states declined on a quarterly and yearly basis. Meanwhile, commercial construction activity in the region continued to weaken despite a slightly improved outlook. Labor markets have also been slow to recover. Unemployment in the region—at 10.5 percent in December—is higher than the national rate of 9.4 percent.
For more in-depth data and analysis from key sectors of the Southeastern economy, read the full report.