EconSouth (Second Quarter 2008)

The State of the States

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

bullet image Sam Addy, director of the University of Alabama's Center for Business and Economic Research, discussed the economic expectations of the state's business leaders in a presentation in Huntsville in May. He cited the second quarter 2008 Compass Bank Business Leaders Confidence Index (BLCI) survey, which shows that economic activity is slowing in the state. But those surveyed expect moderate growth for the state this year.
bullet image The HudsonAlpha Institute for Biotechnology in Huntsville was dedicated in late April. The institute will perform genetic research on more than 1,500 untreatable or poorly treated diseases to further the understanding of how genetics affect the diseases' development. HudsonAlpha researchers also will examine ways to genetically alter plants so biofuel material can be more easily extracted. The $80 million initiative is expected to generate as many as 900 jobs.

bullet image Consumer confidence in Florida in April was at the same recessionary levels as it was during 1990–91 recession, according Chris McCarty, the program director for survey research at the University of Florida's Bureau of Economic and Business Research. "Unlike the relatively mild recession of 2001," he said, "the recession of 1990–91 resulted in a longer time to recover. The question remains whether the [current economic downturn] will get worse. Most economists believe the economy will pick up by late 2008 or early 2009."
bullet image Embraer, a Brazilian aircraft manufacturer, plans to spend $51 million to build a plant at Melbourne International Airport. It will be the company's first U.S. factory, dedicated to final assembly and delivery of the company's Phenom business jets. The 149,500 square foot factory will open by 2011 and will create jobs for approximately 200 people.

bullet image Manufacturing activity in Georgia was up in April? according to the Econometric Center at Kennesaw State University. The center's Georgia Purchasing Managers Index (PMI) Report—a snapshot of the state's manufacturing sector—surpassed 50 for the second consecutive month. (A reading above 50 indicates that manufacturing activity is expanding, below 50, that it's contracting.) "If this trend continues? it would suggest Georgia's manufacturing sector is outperforming the national manufacturing sector?" said Don Sabbarese? professor of economics and director of the Econometric Center.
bullet image In March, Kia Motors opened the Kia Georgia Training Center, the first facility of its West Point automotive assembly complex. The center will provide pre-employment assessment and job-specific training for employees at Kia's $1.2 billion assembly facility, which is scheduled to begin production in 2009. The facility, Kia's first in the United States, will eventually produce 300,000 vehicles a year.

bullet image Employment growth in New Orleans has moderated after a strong rebound following Hurricane Katrina, according to Janet Speyrer, director of the University of New Orleans' Division of Economic and Business Research. "Employment and population totals in the metropolitan area are now both at about 86 percent of pre-Katrina levels," she said. Speaking at an economic seminar at the university in early April, Speyrer noted that future employment gains would likely be strongest in the private educational services and leisure and hospitality sectors.
bullet image This year's New Orleans Jazz and Heritage Festival returned to its traditional seven-day format in late April and early May, drawing nearly 400,000 people. That turnout nearly matched attendance in spring 2005, before Hurricane Katrina. More than half the festivalgoers came from out of town, boosting hotel occupancy to nearly 100 percent. Festival officials estimate the event pumps $300 million into the local economy.

bullet image The Mississippi Institutions of Higher Learning's (IHL) Department of Forecast and Analysis reported in April that the state's index of leading indicators continued to decline. Post-Katrina rebuilding has largely fueled the state's economic growth over the past couple of years. That momentum, however, is waning, reported Darrin Webb, an IHL senior economist. The report showed that Mississippi should post a modest recovery in the second half of 2008 and continued improvement in 2009.
bullet image South Mississippi's newest manufacturing plant, PSL North America, is now hiring and preparing to start production in Pearlington in July. The $100 million, 450,000-square-foot plant will produce 300,000 tons of steel pipe a year for the gas and oil industry. The company plans to hire more than 300 people at an average yearly salary of $50,000.

bullet image In the Nashville area, most of the available economic indicators show slowing economic activity, with some sectors (housing construction and manufacturing) hard hit. But other sectors (health care, education, accommodation, and food services) still show signs of growth. The loss of manufacturing jobs is the primary culprit in the Nashville area's flat job growth, reported David Penn, the director of Middle Tennessee State University's Business and Economic Research Center, in the spring edition of the center's Midstate Economic Indicators.
bullet image Since summer 2006, workers in Franklin have been putting the finishing touches on the Nissan headquarters building for its July opening. The headquarters will oversee the company's operations in the Americas and will employ more than 1,000 people.
This information was compiled by Shalini Patel, an economic analyst at the Atlanta Fed.
Illustrations by Jay Rogers