EconSouth (Second Quarter 1999)

Recent events and trends from the six states of the Sixth Federal Reserve District
" Alabama is adding jobs at about the same rate as the nation, and employment in the state has more or less tracked the nation's performance since last summer. The state's construction sector is currently very strong, with considerable growth focused in Birmingham.
" Ongoing contraction in Alabama's manufacturing sector is led by losses in apparel. But Birmingham is defying state and national trends, showing some net manufacturing employment gains, although month-to-month numbers remain volatile.
" The steel industry continues to suffer from intense foreign competition, particularly from Pacific-basin countries.
" The aerospace industry, based in the Huntsville area, remains quite strong.

" The cruise business is still the hottest segment of Florida's strong tourist industry. Virtually every major cruise line operating in the state has at least one new ship on order, suggesting that growth is expected to continue in that industry. Tourism in central Florida continues to expand, adding more jobs in an already robust market.
" The state's economy as a whole is outperforming both the district's and the nation's, with only the Miami area expanding at a slower rate than the nation.
" The state's aerospace industry, centered in the Melbourne area, remains strong, and the outlook for the industry is solid.
" Georgia's payroll growth is slightly outperforming the district's, with Atlanta and the rest of the state nearly matching in performance since the beginning of the year. In contrast to its stagnation in the district and decline nationally, manufacturing employment in Georgia continues to grow at around 1 percent year over year.
" While Atlanta's single-family housing growth was relatively flat year over year in 1998, Georgia still led the nation last year in the number of single-family housing permits. The state's overall permits remain at a high level even though growth has been flat in 1999.
" Agricultural commodity prices are still low although cotton prices have recovered somewhat from 1998. The Vidalia onion crop is small compared with last year's because of weather-related problems.
" Some rebound in oil prices has helped stabilize drilling, slowing the downturn in exploration in the state. But prices have not been high enough for a long-enough period to engender sufficient confidence to resume oil field development.
" New Orleans' economy continues to be weaker than the rest of the state's, which is expanding at rates similar to the nation's. Baton Rouge, on the other hand, has shown notable strength in services, wholesale and retail trade, and government employment.
" While the U.S. Defense Depart-ment did not support the proposed acquisition of Newport News Shipbuilding by General Dynamics because of concerns over industry competition, Newport News announced that it will continue with its plans to merge with Louisiana's Avondale Industries, a move that has received antitrust clearance from the Justice Department.
" The gambling industry remains a major source of growth for the Gulf Coast with the opening of the largest single casino project to date. This expansion has led AirTran Airways to establish commercial flight service from sev-eral southern cities to the Gulfport-Biloxi Regional Airport.
" While Mississippi's manufacturing sector employment levels have declined slightly overall, the state is adding jobs in areas that are not directly benefiting from the gaming sector's strength.
" Auto component manufacturing is beginning to pick up in the northern portion of the state.
" Conditions in the state's labor markets, which had been among the tightest in the nation, have abated somewhat, particularly recently in east Tennessee. Nashville continues to suffer from labor pressures, especially for skilled employees.
" A shortage of qualified truck drivers is forcing some trucking firms in central Tennessee to leave part of their capital idle, a problem that has occurred to a lesser extent in some other parts of the district.
" Dell Computer announced that it is locating a new computer assembly center in the greater Nashville area.
" Diminished demand for synthetic fiber products has led to industrial layoffs in the eastern part of the state.
Compiled by the regional section of the Atlanta Fed's research department

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