EconSouth (Third Quarter 2004)


The State of the States
Recent events and trends from the six states of the Sixth Federal Reserve District

Huntsville International Airport announced plans for an $87 million expansion that will increase the airport’s passenger capacity. Construction begins this fall and will take five years.
Automotive parts supplier Mando America Corp. announced plans to spend $35 million in an expansion of its Opelika plant. The company will add 170 jobs to its current workforce of 150. It will also move its headquarters from Detroit, Mich., to Opelika. The plant will make parts for Montgomery’s new Hyundai plant as well as for other automakers.
Kronospan, a German wood flooring firm, will invest $200 million–$300 million in a new plant in north Alabama, creating about 400 jobs.
Northrop Grumman in Huntsville will support production of the U.S. Army’s Viper Strike weapon system, designed to destroy targets without damaging nearby objects. DRS Technologies, also in Huntsville, received a $30 million contract to provide diagnostic systems for the Army’s Bradley Fighting Vehicle.
 
Tourism officials say Florida’s summer season has been strong as international visitors took advantage of the weak dollar and good weather. Hotel occupancy, restaurant sales, and theme park attendance were up over year-ago levels. But tourism activity declined significantly in late August and September as a series of hurricanes deterred visitors.
South Florida residential builders and real estate agents report that June and early July construction was up slightly compared to last year while sales jumped significantly. Although prices for some building materials rose, builders have reportedly been able to pass the costs along to buyers.
Damage estimates from hurricanes Charley and Frances range from $22 billion to $30 billion. The Insurance Information Institute estimates that the insurance industry will pay $6.5 billion in claims from Charley alone. Flood damage caused much of the uninsured losses. Rebuilding efforts will boost the construction industry. Damage to citrus crops is expected to significantly affect farm proprietors’ income.
 
The state’s transportation equipment sector continues to expand. Fleetwood Enterprises, the world’s second-largest producer of motor homes and travel trailers, opened another manufacturing plant in Georgia to meet rising demand. The company’s Alma plant, which opened in August, employs about 150 workers. TI Automotive, an auto parts maker, will build a $30 million plant and create 100 jobs in northeast Georgia by 2006.
About 1,400 employees at the Brown & Williamson Corp. cigarette factory in Macon lost their jobs in mid-August as the company completed a merger with R.J. Reynolds Tobacco Co. The factory was middle Georgia’s largest manufacturing plant.
The state’s carpet and floor covering industry is enjoying continued strength in the residential remodeling market, and industry executives report seeing increased demand for carpet in the commercial segment.
 
Union Tank Car Co., one of the nation’s largest railcar leasing firms, announced that it will construct a new $100 million manufacturing plant with a weekly production capacity of about 70 tank cars per week at England Industrial Air Park and Community, located in Alexandria. About 700 manufacturing jobs are expected to be created by the project, which is anticipated to be open by 2006.
The average Louisiana oil rig count held at 167 in July compared to 158 a year earlier while the national rig count climbed by 37 to 1,213. The average price of Louisiana sweet crude rebounded in July to $40.22 per barrel from June’s $38.26 rate. While the price of Louisiana natural gas came down modestly in July, analysts expect prices to remain high because of declining domestic reserves, import difficulties, and higher demand.
 
Gross revenue in Mississippi casinos increased 5.9 percent during the first six months of 2004 compared to the same period in 2003. The opening of a second casino in Natchez will bring 300 to 400 new jobs to the city and will reduce the impact of the recent closing of the nearby International Paper plant.
A Pascagoula company, Rolls Royce Naval Marine, has been awarded a contract to manufacture aircraft carrier propellers for the U.S. Navy. The plant is constructing an 18,000-square-foot expansion to accommodate the new business.
Magnolia Label Co., a producer of labels for food products and consumer goods, will more than double its plant size by the end of the year and add about nine employees when it constructs a new facility in Byram. The company ships labels to domestic firms as well as to companies in China, Israel, Japan, and Vietnam.
 
Tennessee tractor and trailer manufacturing plants are running at maximum capacity. Trucking firms are increasing rates to offset several increasing expenses—new tractors and trailers, fuel, insurance, and drivers’ wages. High demand for trucking is allowing firms to pass along these increased costs in the form of rate hikes.
Next to its Decherd facility, Nissan will construct a $47.3 million plant that will build crankshaft forgings for all vehicles the automaker produces in the United States. The new plant is expected to employ 70 people.
Quebecor World Inc. will cut 450 jobs at its Kingsport printing plant, which currently employs 950 people.
State Farm Insurance Co. will add about 400 jobs at its Murfreesboro operations center to expand its claims, billing, and customer service operations.
Compiled by the regional section of the Atlanta Fed’s research department
Illustrations by Jay Rogers

 

Return to Index  |  Next