EconSouth (Second Quarter 2005)

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

Honda has started building a $70 million, 150,000-square-foot expansion of its engine plant in Lincoln, doubling the size of the existing plant. The expansion is expected to add approximately 100 jobs.
Alabama housing markets remain strong. In Huntsville and Madison County, first-quarter sales of single-family homes reached record highs and were more than 20 percent above year-ago sales.
SemiSouth Laboratories in Starkville is developing silicon carbide applications for the military and electronics markets. The enterprise is expected to create 250 jobs during the next three years.
Toyota Motor Manufacturing recently broke ground on a $250 million expansion at its engine plant in Huntsville that will add 300 jobs to the plant’s payroll.
 
The number of tourists traveling to Central Florida is on pace to set a record this year, up 5.9 percent from 2004, the Orlando/Orange County Convention & Visitors Bureau reported. A forecast prepared for the bureau predicts that 50.9 million tourists will visit the Orlando area this year. That figure includes a 7.5 percent increase over last year, to 2.8 million, in international visitors.
Despite increased fuel costs, Miami-based Carnival Corp., a cruise line, reported a 70 percent surge in first-quarter earnings, propelled by more bookings, higher pricing, and additional capacity.
More than 55,000 residential condo units are being developed in Miami, according to the city’s Jan. 31 large-scale development report, and that number is reportedly increasing. Some reports indicate that many new buyers are using the surging market to turn their condo purchases over for a quick profit.
 
Atlanta office space occupancy rates were up slightly in the first quarter after two years of declines. Much of the leasing was from small users requiring 25,000 square feet or less.
The Pentagon recently approved accelerated production of F/A-22 Raptor fighter jets. That decision allows Lockheed Martin Corp. to speed construction of the planes in Marietta, where about 2,200 of the plant’s 7,800 workers are involved with the Raptor program.
Fort Benning, in Columbus, is expanding. The base’s population is expected to increase by more than 9,800 military and civilian personnel, according to the latest Pentagon report. Construction projects at the post are under way.
Flooring maker Shaw Industries recently expanded its Thomson facility to meet increased demand. The $27 million expansion will allow Dalton-based Shaw to increase its nylon extrusion capability for carpet manufacturing.
 
Global Energy of North America announced plans to open a basalt-fiber pipe manufacturing plant in St. Gabriel and hire as many as 2,000 people in the next three years. The pipe, used to replace the carbon-steel pipe common to the oil industry, is reportedly lighter, cheaper, stronger, and more durable than carbon steel. With steel in short supply, carbon-steel pipe’s cost has escalated.
Recent figures for the Port of New Orleans indicate that general cargo as well as container traffic was up markedly in 2004. Steel imports were particularly strong, up by 109 percent from 2003.
Louisiana’s Department of Transportation will eliminate 425 jobs over the next two years, according to the department head. The move will reportedly save about $22 million in salary and benefit costs.
 
In May, the Isle of Capri casino in Biloxi began opening its $170 million expansion in stages. The resort, the first legal casino in the South, made the investment to compete in the robust leisure market. The resort will add about 125 hotel employees and 350 casino workers.
DuPont DeLisle plans to make an investment of about $100 million to improve operational efficiencies and reduce air emissions at its Pass Christian plant. The investment, intended to significantly reduce the plant’s energy consumption, will also increase the facility’s workforce.
High energy prices have spurred interest in building new rigs for deepwater recovery of oil and gas. Le Tourneau Inc., which manufactures rigs in Vicksburg, is currently completing one of the giant rigs and has another on the way.
 
Hotel construction is robust in Knoxville. Of the seven new hotels that opened in Tennessee in 2004, four were in Knoxville, according to Smith Travel Research. In addition, the Knoxville area is reportedly leading the state in the number of hotels either under construction or in the planning phase.
Strong sales have led to the expansion of a building materials supplier, 84 Lumber, to Knox County. The company will build a $4 million facility this summer in WestBridge Business Park that should eventually employ 200 people.
U.S. Fence, the nation’s largest producer of wood and vinyl fencing, announced plans to expand its facility in Hawkins County and hire 300 new employees. The company expects to spend $18.6 million on this expansion, its third in three years.
This information was compiled by Dave Avery, a senior economic analyst at the Atlanta Fed.
Illustrations by Jay Rogers

 

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