EconSouth (Third Quarter 2006)

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Volume 8, Number 3
Third Quarter 2006


The Energy Debate: Is Ethanol the Answer?

The Gulf Coast’s Tourism Comeback: Playing for Even Higher Stakes?

Hurricanes Spawn
Insurance Rate Increases

Katrina Update: One Year After


Fed @ Issue


Q & A

State of the States

Research Notes & News

Southeastern Economic Indicators



  The State of the States

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

Nucor Corp. plans to build a $150 million steel galvanizing facility in Decatur. The company estimates that construction will take two years, with operations expected to begin in mid-2008. A spokesman said the plant, which will employ about 200 people, will improve the company’s service to the Southeast’s automobile manufacturing industry.
The Port of Huntsville’s International Intermodal Center saw a 35 percent increase in rail traffic during the fiscal year that ended June 30. The port attributed the growth in shipments to new and expanded automotive plants in the state.
Hunt Refining Co. announced plans for an expansion of its Tuscaloosa refinery. The expansion, estimated to cost between $450 million and $500 million, would double the refinery’s gasoline and diesel fuel production. It would be the largest private investment in Tuscaloosa County since Mercedes-Benz U.S. International’s $600 million expansion, which was completed in 2005.

Hotel taxes in Miami-Dade County increased 10 percent in May compared to a year ago. Tax collections increased by $330,000 over 2005 as hotels continued to raise rates because of the strong travel market.
Metro Orlando’s commercial real estate market ranks ninth in the nation in construction of office space, according to the Metro Orlando Economic Commission. Real estate consulting firm Cushman and Wakefield predicts that Orlando will be the nation’s top commercial real estate performer for the next two years.
Home sales numbers indicate that south Florida’s housing market continues to stagnate, according to the Florida Association of Realtors. Sales in June were almost unchanged from May, but inventories of homes for sale had tripled from a year earlier. High prices and increasing insurance and mortgage rates have adversely affected the market, according to reports.

AirTran Airways expects to add about 2,500 jobs in Georgia over the next five years, continuing its rapid growth. The airline, which currently employs 5,200 people in Georgia, expects to add 500 workers per year over the next five years.
A Japanese manufacturer, Nichiha, is planning to build its first U.S. plant, a $78 million venture, in Bibb County. The company, which produces wear-resistant exteriors for homes and businesses, will hire about 100 workers. This announcement marks the first new manufacturing plant in Bibb County in more than 20 years.
Atlanta’s Hartsfield Jackson International Airport recently completed its fifth runway, a $1.28 billion project. Airport officials expect it to reduce delays and thus save airlines millions of dollars.

L&L Steel Builders Inc. of Prairieville plans to open a 100,000-square-foot plant in New Orleans Regional Business Park to manufacture steel for home construction. The company expects to begin construction this year. Initially, 150 people would be employed, with eventual staffing of more than 600.
Registration for the 2006 Realtors Conference & Expo in New Orleans, to be held November 10–13, is outpacing all of the organization’s previous conventions, including last year’s record-breaking convention in San Francisco. Preregistration is 16 percent ahead of last year’s pace. Convention organizers expect 30,000 people to attend.
Through the first 11 months of the current fiscal year, Louisiana’s gambling revenue was nearly $474 million, up sharply from $414 million a year ago. In May, gamblers spent more than $220 million at the state’s 16 casinos, up from almost $200 million in May 2005.

Ten casinos employing 13,000 people should be back in business on the Mississippi Gulf Coast by the fall, according to the executive director of the Mississippi Gaming Commission. Before Hurricane Katrina came ashore on August 29, 2005, 12 casinos on the Gulf Coast employed 15,000 people.
Gaming on the Mississippi Gulf Coast grossed $74 million in July, making it the strongest month so far since coastal casinos reopened after Katrina struck. Gross gaming revenue for the area amounted to $102 million in July 2005.
SeverCorr’s $880 million steel mill in Columbus is reportedly on target for completion in 2007. The plant, expected to employ about 450 workers, will produce steel primarily for the region’s automotive industry.
Koch Foods will expand an existing poultry production plant in Morton, creating 370 new jobs. Mississippi’s poultry processing plants represent a $2 billion industry, according to the Mississippi State University Extension Service.

McKee Foods will add 175 jobs in a $50 million expansion of its Collegedale plant, company officials said. McKee Foods, best known for its Little Debbie snack cakes, has more than 3,100 employees in the Chattanooga area.
General Motors Corp. has chosen its production plant in Spring Hill to make the gas-electric hybrid version of the Saturn Vue SUV.
Oreck Corp. recently announced the opening of a factory in Cookeville. The facility makes upright and canister vacuums and is slated to add other products. The project’s first phase created about 100 jobs. The New OrleansÐbased firm needed more manufacturing capacity and an inland location, according to a company spokesman.
Homesteader Inc., a Claiborne County maker of enclosed cargo trailers, hydraulic dump trailers, and horse trailers, announced its seventh expansion in
20 years. A company spokesman said hiring to fill potentially 200 new jobs will be spread over the next three years and will include positions from assembly workers to supervisors.
This information was compiled by Dave Avery, a senior economic analyst at the Atlanta Fed.
Illustrations by Jay Rogers