EconSouth (First Quarter 2005)

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

Jim Walter Resources, an Alabama mine operator, will spend about $135 million to increase output at its mine near Tuscaloosa because of rising coal prices. The coal is used in steelmaking, which has seen a surge in demand, especially from foreign markets such as China.
Wachovia Corp. will lay off 1,180 employees in Birmingham as a result of its merger with SouthTrust Corp., according to a spokesman for the Alabama Department of Economic and Community Affairs. The cuts began in January 2005 and are scheduled to continue through March 2006.
An Indiana foundry is investing $60 million to build a plant in the city of Cullman, a move that will create 300 new jobs. Most of the plant’s positions will be filled by Alabamans. The plant will make parts for heavy equipment. Construction began in January, with production expected to start in December 2005.
Orlando apartment dwellers face higher rents and fewer choices. Occupancy levels range from approximately 90 percent to 100 percent, above the national average. Some complexes have waiting lists, and move-in incentives are being eliminated.
Organizers of Super Bowl XXXIX, held in Jacksonville in February, say the game brought about 100,000 visitors and had a local economic impact of more than $250 million.
Florida’s orange harvest of 160 million boxes was the smallest since the 1991–92 season, when 139.8 million boxes were picked. Last summer’s hurricanes reduced the crop by millions of boxes’ worth of oranges.
Orlando, a top trade-show city, posted record numbers in 2004 and anticipates another record this year. The Orange County Convention Center hosted 254 shows and meetings in 2004 with an estimated attendance of 1.36 million, up from 204 events and 1.15 million attendees in 2003.
Analysts in the Atlanta area believe that the metro area’s apartment market has bottomed out and has begun to rebound. Rents are moving upward, the number of lookers is increasing, and concessions such as move-in bonuses are declining. The recovery is more firmly established in intown and northern metro markets while the southside, westside, and eastside markets continue to lag.
Photocircuits, a computer circuit board producer in Peachtree City, cited Asian competition for its decision, announced in December 2004, to shut down. About 525 jobs will be eliminated this year.
Target Corp. recently announced that it will build a large distribution center in Midway that will initially employ 500 workers and eventually add up to 300 more. Target currently has 40 stores in Georgia.
NASA’s Michoud plant in New Orleans is resuming construction of the external fuel tanks for the space shuttle. The plant had ceased making the tanks since the February 2003 Columbia space shuttle accident though workers had been modifying their design. Michoud expects to produce five or six tanks annually. The plant employs about 2,050 people.
The Army recently ordered 212 armored security vehicles from the Textron Marine and Land Systems’ plant in New Orleans for use in Iraq. Textron will hire 200 more workers in 2005 to meet the order’s production requirements.
High oil and gas prices and improved recovery technologies are stimulating spending among New Orleans drilling firms. Energy Partners of New Orleans announced a 5 percent increase in its exploration and production budget over 2004 levels. Much of the firms’ drilling will occur in the Gulf of Mexico.
Real estate development is reportedly robust in southern Mississippi. Major construction projects there include high-rise condominiums from Biloxi to Pass Christian. The Hard Rock Casino and Hotel facility in Biloxi is a $250 million project scheduled to be completed this summer, and the Beau Rivage resort is constructing a $40 million golf course 15 miles north of Biloxi.
Howard Industries, the largest employer in Jones County, with more than 4,000 employees, will open its new plant in the county’s town of Ellisville this year. The firm, which manufactures large commercial electrical transformers, is expanding as a result of anticipated demand.
Because of increasing demand, wood products companies Masonite Industries, Hood Industries, and Georgia-Pacific are placing orders for new equipment to expand production.
Tennessee tractor-trailer manufacturers are increasing capacity to meet rising demand for freight services. In addition, many older trucks now in use will need to be replaced this year, and some manufacturers anticipate selling all the trucks they can build in 2005.
Tennessee firms that make tools and specialized production machinery noted that business was good. Orders are high, and firms are purchasing new equipment and hiring workers to help increase production.
On its first day, the Tennessee lottery recorded sales estimated at $10.8 million, about $1.87 per capita. Of that amount, the state made $3 million in profits, all of which go toward education.
Bert-Co, a Los Angeles–based printing company, announced a new printing plant, expected to eventually employ 230 people, to be located in Pulaski.
Goodman Manufacturing Co., a producer of air-conditioning and heating equipment, is expanding production at its Fayetteville plant and adding 300 jobs.
Compiled by the regional section of the Atlanta Fed’s research department
Illustrations by Jay Rogers


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