EconSouth (Third Quarter 2003)

Recent events and trends from the six states of the Sixth Federal Reserve District
Auto and truck production continues to help the state’s economy. Toyota officials announced a $20 million expansion of the automaker’s Huntsville engine plant; the expansion will add about 150 jobs to the facility. Also, an auto parts supplier based in Germany recently announced plans to build a plant in Tuscaloosa.
Teledyne Continental Motors Inc. reported plans to cut 100 jobs at its aircraft engine plants in Mobile and Abbeville. The cutbacks are largely in response to weakness in the aviation market.
The state’s textile sector continues to contract, with employment down by about 10 percent since 2001. Pillowtex Fieldcrest Canon filed for bankruptcy and closed its mill in Scottsboro, laying off 264 workers. The shutdown was attributed to increased foreign competition and weak demand. In addition, Johnson Industries, located in Opp, closed its weaving operation in August.

Recent attendance levels at central Florida theme parks are lower than expected. As a result, Walt Disney World reportedly laid off some of its specialty workers for the first time in nine years.
A Miami cruise line reported a rise in booking activity but noted that passengers were purchasing tickets closer to cruise times and that price weakness continued.
Coca-Cola recently opened its first new juice-production facility in more than 30 years in Auburndale. The plant is projected to employ 300 workers by 2006 and to cost $113 million.
Some boat manufacturers reported a slight upturn in business activity, but the overall market remained sluggish. Sales of larger boats were especially weak.
The 8-Nation Economic Summit (also known as the G8 Summit) is coming to Sea Island next June. State officials expect millions of dollars to be spent along the coast from Savannah to St. Mary’s in preparation for the event and estimate that the total economic impact will be $300 million–$500 million.
Good growing conditions gave many peach farmers their best crop in five years. An unusually cold winter and wet spring combined for the boost in production.
A $120 million expansion of the Port of Savannah was recently announced. Georgia officials say the project — planned to be completed by the end of 2005 — could create 10,800 jobs statewide. Container capacity at the port will be increased by 20 percent.
The nation’s largest single receiving and shipping point for liquefied natural gas is growing. In Lake Charles, Trunkline LNG is beginning a $166 million expansion. When complete in 2006, the plant will have doubled its capacity to 1.2 billion cubic feet per day. The move comes amid nationwide concerns about natural gas prices and supplies.
Nitrogen- and ammonia-based chemical manufacturers have announced additional layoffs. The jobs cuts are attributed to soaring prices of natural gas, a key ingredient in many manufacturing processes, and to foreign competition.
Exxon Mobile Corp. will shut down its New Orleans headquarters and move the 380 jobs to Houston. Exxon Mobile does, however, plan to maintain a substantial presence in Louisiana.
Work is under way on a $64 million modernization project by Northrop Grumman Ship Systems — part of a $344 million expansion of the firm’s facilities in Gulfport and Pascagoula. Company officials said that the project could create as many as 2,000 new jobs.
Mississippi’s Manufacturers Association reported that since January the closure of 50 plants has caused the loss of 3,867 jobs in the state. Last year, 11,036 jobs were lost because of closings by 117 manufacturers.
Gaming tax revenues for fiscal year 2003 (ending in June) were the highest ever in the state, according to statistics from the state tax commission. Officials expect the positive trend to continue when the July revenue figures are released in August.
The Nashville Association of Realtors called the first half of 2003 the strongest residential real estate market on record in Nashville’s history. Home sales increased by over 9 percent from June 2002, and for the first six months of 2003 residential sales were up by 4.7 percent from the same period a year ago.
Nissan North America will spend $250 million to expand its Smyrna and Decherd plants to move assembly of the Pathfinder sport utility vehicle to Tennessee from Japan. The move will create about 800 jobs at the plants.
One of the nation’s largest credit card processing companies is adding 400 new jobs to its Knoxville facility. The expansion will bring total employment to about 1,200 workers.
Compiled by the regional section of the Atlanta Fed’s research department

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