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About


The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.

The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.

Postings are weekly.


February 4, 2014

Southeast Commercial Construction Update Strikes Upbeat Note

The Atlanta Fed’s fourth quarter 2013 commercial construction poll results were fairly optimistic. The majority of commercial construction contacts indicated that pace of nonresidential construction activity (measured by square feet) and the pace of multifamily construction (measured by number of units) had increased from year-earlier levels (see the charts).

Pace of Nonresidential Construction Activity (sq ft) versus a Year Ago

Pace of Multifamily Construction Activity (# of units) versus a Year Ago

Most contacts reported backlogs greater than year-earlier levels, suggesting a healthy pipeline of construction activity (see the chart).

Backlog versus a Year Ago

More contacts reported upward pressure on labor costs than in previous polls (see the chart). Perhaps not surprisingly, this trend of upward pressure on labor costs for commercial contractors is consistent with our recent reports (here and here, for example) of upward pressure on labor costs for residential builders.

Labor Costs versus a Year Ago

Most contacts also noted upward pressure on material costs and have consistently reported this pressure several quarters in a row (see the chart).

Material Costs versus a Year Ago

Relative to recent polls, the number of respondents reporting that the amount of available credit exceeded demand increased; the number of respondents reporting that the amount of available credit fell short of demand also increased (see the chart). Another way of viewing the results is that more than half of the respondents indicated that amount of available credit met or exceeded demand, which has been the case for three consecutive quarters.

How available do you perceive commercial construction finance to be in your market?

When asked what type of projects will dominate the landscape during 2014, business contacts indicated that they plan construction activity across a wide variety of property types. The property types mentioned include multifamily housing/senior housing, education, office, health care/medical, infrastructure/energy, retail/restaurant, municipal buildings, hotels, and industrial/warehouse.

Note: Fourth quarter 2013 poll results were collected January 6–15, 2014, and are based on responses from 19 business contacts. Participants of this poll included general contractors, subcontractors, lenders, developers, and material fabricators with footprints of varying sizes across the Southeast.

If you are a commercial contractor and would like to participate in this poll, please let us know by sending a note to RealEstateCenter@atl.frb.org.

Photo of Jessica DillBy Jessica Dill, senior economic research analyst in the Atlanta Fed's research department


January 28, 2014

Are the Clouds Lifting in the Sunshine State?

Each month, the Atlanta Fed produces a Data Digest for each state in our district. Beyond providing an economic snapshot for each state, the Data Digest also breaks down the information by metro area or industry, where appropriate.

Florida’s latest Data Digest indicates that the state’s overall economic activity is improving. For example, a broad measure of economic performance—the Coincident Economic Activity Index, which the Philadelphia Fed compiles for all 50 states—has been steadily improving since 2010 and improved at a slightly faster clip than the nation since August 2013 (see the chart).

140128a

Looking at Florida’s labor markets, you can see that the state’s unemployment rate has improved from a peak of 11.4 percent in early 2010 to under 7 percent in November 2013 (see the chart). In addition, the state has regained more than half of the jobs that were lost during the downturn. The leisure and hospitality, education and health care, and retail trade sectors have more jobs today than prior to the downturn. Regarding the first sector, my Atlanta Fed colleague Gloria Guzman wrote in a previous SouthPoint post that the leisure and hospitality sector has been a significant contributor to Florida’s economic recovery. Meanwhile, employment in the manufacturing and construction sectors still has a long way to go before full recovering can be declared.

Employment Loss and Gain by Industry: Florida, November 2013

The University of Florida’s Bureau of Economic and Business Research reported that although consumer confidence is off its recession lows, improvement has stalled. Despite that slowing, Florida sales tax revenue continues to rebound (see the chart). The Florida Department of Revenue notes that sales tax has been positively affected by the healthy activity in the leisure and hospitality sector.

Florida Sales Tax Revenue and Consumer Confidence, November 2013

The Atlanta Fed’s monthly real estate poll of homebuilders and brokers has noted improving home prices, and other data confirm this trend in Florida. The state has experienced an improvement in home prices of 8.4 percent from November 2012 to November 2013, according to the Federal Housing Finance Agency. Furthermore, the S&P Case-Shiller home price index shows similar trends in Miami and Tampa (see the chart).

S&P/Case-Shiller Home Price Index, through October 2013

Our monthly real estate poll also showed a rebound in residential construction (see the chart). Data from the U.S. Census Bureau confirm this trend, although it is important to note that activity is well below the prerecession peak. Although we do not expect a return to 2005 levels of activity, the steady rebound in new home construction is another signal of the state’s overall economic recovery.

New Residential Home Construction Permits, November 2013

Florida’s economy is clearly moving in the right direction. The Atlanta Fed’s surveys as well as regular input from business leaders and economic data all point to a steady rebound.

By Marycela Diaz-Unzalu, an economic and financial education specialist in the Atlanta Fed’s Miami Branch


January 24, 2014

Housing Continues to Rebound

The Atlanta Fed’s December 2013 Southeast housing market poll results show ongoing progress in the housing recovery. The majority of builders and brokers reported that sales on a year-over-year basis continued to be flat to slightly up (see the chart).

December 2013 Southeast Home Sales vs. a Year Earlier

After several months of reports of declining buyer traffic, most brokers and more builders indicated that buyer traffic was up on a year-over-year basis (see the chart).

December 2013 Southeast Buyer Traffic vs. a Year Earlier

The majority of brokers continued to report that home inventory levels had fallen from year-earlier levels, and most builders reported that inventory levels remain unchanged (see the chart).

December 2013 Southeast Home Inventory vs. a Year Earlier

The majority of brokers and builders indicated that home prices increased slightly in December (see the chart).

December 2013 Home Price vs. a Year-ago

Builders continued to indicate upward pressure on labor costs. More than 90 percent of builders reported that labor costs had increased in December 2013, compared with less than 80 percent in December 2012 and roughly 40 percent in December 2011 (see the chart).

Southeast Builder Labor Costs vs. One Year Ago

While half of all contacts reported that the amount of available credit is equal to demand, just shy of half reported that the amount of available credit falls short of demand (see the charts).

Brokers: How available do you perceive mortgage finance to be in your market?

Builders: How available do you perceive mortgage finance to be in your market?

Most contacts continued to report that the available construction and development finance falls short of existing demand (see the chart). Even so, several contacts commented that when the components of construction and development finance are broken out, credit for the vertical construction of structures is fairly available, but obtaining credit for lot development remains challenging.

Builders: How available do you perceive construction & development finance to be in your market?

During the next three months, builders expect sales growth to be flat to slightly up, and brokers’ expectations are mixed (see the charts). Expectations remain fairly positive overall, however; fewer contacts are as optimistic about sales growth as they were one year ago.

Southeast Builder Home Sales Expectations Next 3 Months

Southeast Broker Home Sales Expectations Next 3 Months

More than half of all builders expect activity to increase over the next three months, but the outlook is more subdued than a year earlier (see the chart). Fewer builders expect construction activity to increase over the next three months compared to one year ago.

Southeast Builder Construction Expectations Next 3 Months

Note: December poll results are based on responses from 44 residential brokers and 24 homebuilders and were collected January 6–15, 2014. The housing poll's diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. Positive values in the index indicate increased activity, and negative values indicate decreased activity.

If you are a real estate broker or homebuilder and would like to participate in this poll, please let us know by sending a note to RealEstateCenter@atl.frb.org.

Photo of Jessica DillBy Jessica Dill, senior economic research analyst in the Atlanta Fed's research department



January 9, 2014

Regional Manufacturing Ends 2013 with a Whimper, but Optimism Is Rising

Although manufacturing in the Southeast was in expansion territory for 10 of the first 11 months of 2013, the sector closed out the year in unspectacular fashion. The December Southeast Purchasing Managers Index (PMI) report was released on January 6, and the final reading for 2013 was 48.4 points, which is a 3.8-point drop from November, a disappointing finish to what was a good year. However, the average PMI for 2013 was a not-so-bad 52.0, and optimism among purchasing agents climbed for the second consecutive month.

The Southeast PMI is produced by the Econometric Center at Kennesaw State University and provides an analysis of current conditions for the manufacturing sector in Alabama, Georgia, Florida, Louisiana, Mississippi, and Tennessee. The survey is based on responses from purchasing agents from manufacturing companies in those states. The survey measures activity in new orders, production, employment, supplier delivery time, and finished inventories. A reading on this index above 50 represents an expansion in the manufacturing sector, and a reading below 50 indicates a contraction.

The 3.8 point drop in December can be attributed almost entirely to weakness for new orders and production. Both indexes fell 12.2 points compared with November and were at their lowest readings for all of 2013. Interestingly, both indexes experienced similar contractions in July 2013, only to rebound the following month into expansion territory. The employment index held firm at 52, which generally indicates manufacturing payrolls increased during the month. The supplier delivery times index increased 2 points, meaning that purchasing agents are waiting longer to get materials from their suppliers. Slower delivery times are generally interpreted as a sign that suppliers are experiencing strong demand for their products. The finished inventories index was up 3.1 points over November. The index remained below 50 for the eighth consecutive month, suggesting that customer inventories are low or close to desired levels (see the chart).

Southeast Purchasing Managers Index

At the state level, only Georgia and Florida closed out the year in expansion territory. Florida was particularly strong, registering 58.1 points in December. Alabama, Louisiana, Mississippi, and Tennessee all ended the year below the 50-point threshold.

A very encouraging aspect of the December report was the optimism level of survey respondents. When asked for their production expectations for the next three to six months, 53 percent expect production to be higher, the highest level of optimism since January 2013.

Based on input from the Atlanta Fed’s contacts in manufacturing and on trends in national data, it appears unlikely that December’s fall in regional new orders and production is the beginning of a trend. In addition, with the employment index expanding and the level of optimism for future production rising, conditions appear favorable that the Southeast PMI will rebound in January. In the meantime, singing a stanza of “Auld Lang Syne” to bid farewell to 2013 might be in order. Or if you’re like me, just sing the first line (because that’s all you know) and mumble the rest. Here’s wishing everyone a happy new year!

By Troy Balthrop, a Regional Economic Information Network analyst in the Atlanta Fed’s Nashville Branch


February 4, 2014

Southeast Commercial Construction Update Strikes Upbeat Note

The Atlanta Fed’s fourth quarter 2013 commercial construction poll results were fairly optimistic. The majority of commercial construction contacts indicated that pace of nonresidential construction activity (measured by square feet) and the pace of multifamily construction (measured by number of units) had increased from year-earlier levels (see the charts).

Pace of Nonresidential Construction Activity (sq ft) versus a Year Ago

Pace of Multifamily Construction Activity (# of units) versus a Year Ago

Most contacts reported backlogs greater than year-earlier levels, suggesting a healthy pipeline of construction activity (see the chart).

Backlog versus a Year Ago

More contacts reported upward pressure on labor costs than in previous polls (see the chart). Perhaps not surprisingly, this trend of upward pressure on labor costs for commercial contractors is consistent with our recent reports (here and here, for example) of upward pressure on labor costs for residential builders.

Labor Costs versus a Year Ago

Most contacts also noted upward pressure on material costs and have consistently reported this pressure several quarters in a row (see the chart).

Material Costs versus a Year Ago

Relative to recent polls, the number of respondents reporting that the amount of available credit exceeded demand increased; the number of respondents reporting that the amount of available credit fell short of demand also increased (see the chart). Another way of viewing the results is that more than half of the respondents indicated that amount of available credit met or exceeded demand, which has been the case for three consecutive quarters.

How available do you perceive commercial construction finance to be in your market?

When asked what type of projects will dominate the landscape during 2014, business contacts indicated that they plan construction activity across a wide variety of property types. The property types mentioned include multifamily housing/senior housing, education, office, health care/medical, infrastructure/energy, retail/restaurant, municipal buildings, hotels, and industrial/warehouse.

Note: Fourth quarter 2013 poll results were collected January 6–15, 2014, and are based on responses from 19 business contacts. Participants of this poll included general contractors, subcontractors, lenders, developers, and material fabricators with footprints of varying sizes across the Southeast.

If you are a commercial contractor and would like to participate in this poll, please let us know by sending a note to RealEstateCenter@atl.frb.org.

Photo of Jessica DillBy Jessica Dill, senior economic research analyst in the Atlanta Fed's research department


January 28, 2014

Are the Clouds Lifting in the Sunshine State?

Each month, the Atlanta Fed produces a Data Digest for each state in our district. Beyond providing an economic snapshot for each state, the Data Digest also breaks down the information by metro area or industry, where appropriate.

Florida’s latest Data Digest indicates that the state’s overall economic activity is improving. For example, a broad measure of economic performance—the Coincident Economic Activity Index, which the Philadelphia Fed compiles for all 50 states—has been steadily improving since 2010 and improved at a slightly faster clip than the nation since August 2013 (see the chart).

140128a

Looking at Florida’s labor markets, you can see that the state’s unemployment rate has improved from a peak of 11.4 percent in early 2010 to under 7 percent in November 2013 (see the chart). In addition, the state has regained more than half of the jobs that were lost during the downturn. The leisure and hospitality, education and health care, and retail trade sectors have more jobs today than prior to the downturn. Regarding the first sector, my Atlanta Fed colleague Gloria Guzman wrote in a previous SouthPoint post that the leisure and hospitality sector has been a significant contributor to Florida’s economic recovery. Meanwhile, employment in the manufacturing and construction sectors still has a long way to go before full recovering can be declared.

Employment Loss and Gain by Industry: Florida, November 2013

The University of Florida’s Bureau of Economic and Business Research reported that although consumer confidence is off its recession lows, improvement has stalled. Despite that slowing, Florida sales tax revenue continues to rebound (see the chart). The Florida Department of Revenue notes that sales tax has been positively affected by the healthy activity in the leisure and hospitality sector.

Florida Sales Tax Revenue and Consumer Confidence, November 2013

The Atlanta Fed’s monthly real estate poll of homebuilders and brokers has noted improving home prices, and other data confirm this trend in Florida. The state has experienced an improvement in home prices of 8.4 percent from November 2012 to November 2013, according to the Federal Housing Finance Agency. Furthermore, the S&P Case-Shiller home price index shows similar trends in Miami and Tampa (see the chart).

S&P/Case-Shiller Home Price Index, through October 2013

Our monthly real estate poll also showed a rebound in residential construction (see the chart). Data from the U.S. Census Bureau confirm this trend, although it is important to note that activity is well below the prerecession peak. Although we do not expect a return to 2005 levels of activity, the steady rebound in new home construction is another signal of the state’s overall economic recovery.

New Residential Home Construction Permits, November 2013

Florida’s economy is clearly moving in the right direction. The Atlanta Fed’s surveys as well as regular input from business leaders and economic data all point to a steady rebound.

By Marycela Diaz-Unzalu, an economic and financial education specialist in the Atlanta Fed’s Miami Branch


January 24, 2014

Housing Continues to Rebound

The Atlanta Fed’s December 2013 Southeast housing market poll results show ongoing progress in the housing recovery. The majority of builders and brokers reported that sales on a year-over-year basis continued to be flat to slightly up (see the chart).

December 2013 Southeast Home Sales vs. a Year Earlier

After several months of reports of declining buyer traffic, most brokers and more builders indicated that buyer traffic was up on a year-over-year basis (see the chart).

December 2013 Southeast Buyer Traffic vs. a Year Earlier

The majority of brokers continued to report that home inventory levels had fallen from year-earlier levels, and most builders reported that inventory levels remain unchanged (see the chart).

December 2013 Southeast Home Inventory vs. a Year Earlier

The majority of brokers and builders indicated that home prices increased slightly in December (see the chart).

December 2013 Home Price vs. a Year-ago

Builders continued to indicate upward pressure on labor costs. More than 90 percent of builders reported that labor costs had increased in December 2013, compared with less than 80 percent in December 2012 and roughly 40 percent in December 2011 (see the chart).

Southeast Builder Labor Costs vs. One Year Ago

While half of all contacts reported that the amount of available credit is equal to demand, just shy of half reported that the amount of available credit falls short of demand (see the charts).

Brokers: How available do you perceive mortgage finance to be in your market?

Builders: How available do you perceive mortgage finance to be in your market?

Most contacts continued to report that the available construction and development finance falls short of existing demand (see the chart). Even so, several contacts commented that when the components of construction and development finance are broken out, credit for the vertical construction of structures is fairly available, but obtaining credit for lot development remains challenging.

Builders: How available do you perceive construction & development finance to be in your market?

During the next three months, builders expect sales growth to be flat to slightly up, and brokers’ expectations are mixed (see the charts). Expectations remain fairly positive overall, however; fewer contacts are as optimistic about sales growth as they were one year ago.

Southeast Builder Home Sales Expectations Next 3 Months

Southeast Broker Home Sales Expectations Next 3 Months

More than half of all builders expect activity to increase over the next three months, but the outlook is more subdued than a year earlier (see the chart). Fewer builders expect construction activity to increase over the next three months compared to one year ago.

Southeast Builder Construction Expectations Next 3 Months

Note: December poll results are based on responses from 44 residential brokers and 24 homebuilders and were collected January 6–15, 2014. The housing poll's diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. Positive values in the index indicate increased activity, and negative values indicate decreased activity.

If you are a real estate broker or homebuilder and would like to participate in this poll, please let us know by sending a note to RealEstateCenter@atl.frb.org.

Photo of Jessica DillBy Jessica Dill, senior economic research analyst in the Atlanta Fed's research department



January 9, 2014

Regional Manufacturing Ends 2013 with a Whimper, but Optimism Is Rising

Although manufacturing in the Southeast was in expansion territory for 10 of the first 11 months of 2013, the sector closed out the year in unspectacular fashion. The December Southeast Purchasing Managers Index (PMI) report was released on January 6, and the final reading for 2013 was 48.4 points, which is a 3.8-point drop from November, a disappointing finish to what was a good year. However, the average PMI for 2013 was a not-so-bad 52.0, and optimism among purchasing agents climbed for the second consecutive month.

The Southeast PMI is produced by the Econometric Center at Kennesaw State University and provides an analysis of current conditions for the manufacturing sector in Alabama, Georgia, Florida, Louisiana, Mississippi, and Tennessee. The survey is based on responses from purchasing agents from manufacturing companies in those states. The survey measures activity in new orders, production, employment, supplier delivery time, and finished inventories. A reading on this index above 50 represents an expansion in the manufacturing sector, and a reading below 50 indicates a contraction.

The 3.8 point drop in December can be attributed almost entirely to weakness for new orders and production. Both indexes fell 12.2 points compared with November and were at their lowest readings for all of 2013. Interestingly, both indexes experienced similar contractions in July 2013, only to rebound the following month into expansion territory. The employment index held firm at 52, which generally indicates manufacturing payrolls increased during the month. The supplier delivery times index increased 2 points, meaning that purchasing agents are waiting longer to get materials from their suppliers. Slower delivery times are generally interpreted as a sign that suppliers are experiencing strong demand for their products. The finished inventories index was up 3.1 points over November. The index remained below 50 for the eighth consecutive month, suggesting that customer inventories are low or close to desired levels (see the chart).

Southeast Purchasing Managers Index

At the state level, only Georgia and Florida closed out the year in expansion territory. Florida was particularly strong, registering 58.1 points in December. Alabama, Louisiana, Mississippi, and Tennessee all ended the year below the 50-point threshold.

A very encouraging aspect of the December report was the optimism level of survey respondents. When asked for their production expectations for the next three to six months, 53 percent expect production to be higher, the highest level of optimism since January 2013.

Based on input from the Atlanta Fed’s contacts in manufacturing and on trends in national data, it appears unlikely that December’s fall in regional new orders and production is the beginning of a trend. In addition, with the employment index expanding and the level of optimism for future production rising, conditions appear favorable that the Southeast PMI will rebound in January. In the meantime, singing a stanza of “Auld Lang Syne” to bid farewell to 2013 might be in order. Or if you’re like me, just sing the first line (because that’s all you know) and mumble the rest. Here’s wishing everyone a happy new year!

By Troy Balthrop, a Regional Economic Information Network analyst in the Atlanta Fed’s Nashville Branch