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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.


June 15, 2012

Capital expenditure plans for regional firms

We recently reached out to our regional business contacts to gauge their intentions regarding capital expenditures. The results of our regional survey showed that over half plan to increase capital spending over the next six to 12 months. Only 14 percent anticipate decreasing spending from current levels.


Of the businesses that planned to increase spending in the near term, high expected growth of sales and the need to replace information-technology equipment were the two most common factors driving their plans. Firms that commented in the "other factors" category cited expansions as reasons for increasing spending now. Decreased economic/financial uncertainty was the least cited factor.


Among the businesses that said they do not plan to increase spending in the near term, firms cited increased or high economic/financial uncertainty, limited need to replace capital goods, and low expected growth of sales as the major factors behind not increasing capital spending.


Indications are that the broader regional economy continues to grow at a modest pace, and the results from our recent capital expenditure poll appear to support that conclusion. Firms continue to invest, driven largely by expectations for improved sales. Those that have chosen to hold off noted that uncertainty is the main factor, so if the future becomes less cloudy we might expect further increases in capital spending.

Photo of Mike ChrisztBy Mike Chriszt, a vice president in the Atlanta Fed's research department


March 2, 2012

Atlanta Fed’s Beige Book shows an increase in regional economic activity

Eight times per year, each Federal Reserve Bank gathers anecdotal information on current economic conditions in its district through reports from Reserve Bank and branch directors and interviews with key business contacts, economists, market experts, and other sources. Results are published in the Beige Book on the Federal Reserve Board of Governors website. The Atlanta Fed's Regional Economic Information Network (REIN) provides a robust platform for compiling our Reserve Bank's contribution to the Beige Book.

We tend to see the our Beige Book exercise as a touch point for the middle of the Federal Open Market Committee's cycle, where we bring the intelligence gathered by our regional executives and other sources to our staff economists and Atlanta Fed President Dennis Lockhart. It helps inform our forecast for broader U.S. economic activity and gives President Lockhart the latest input from business and community leaders throughout the Southeast.

The latest Beige Book was published February 29. The opening sentence to the Atlanta Fed's latest Beige Book reads:

"Sixth District business contacts described economic activity as expanding at a somewhat stronger pace in January and early February compared with late last year. Expectations were generally more positive, although firms continued to express caution with regard to the outlook."

Importantly, the rising pace of economic activity in the region should not be viewed as evidence that the economy here is taking off. It is performing better, but it would be a mistake to interpret this improvement as a sign that the economy is firing on all cylinders. Our outlook is still rather tame.

President Lockhart noted this in his February 14 speech at New College of Florida in Sarasota:

"Not all the recent economic news has been uniformly positive, but the balance of incoming data has been rather upbeat. This gives me confidence in the view that economic growth in 2012 will be noticeably better than in 2011."

He continued:

"Significant unanticipated developments are part of economic life, but barring shocks, we at the Federal Reserve Bank of Atlanta expect 2.5 to 3 percent growth for 2012."

Fed Chairman Ben Bernanke struck a similar tone in the February 29 Monetary Policy Report to Congress:

"Looking ahead, growth is likely to be modest during the coming year, as several factors appear likely to continue to restrain activity, including restricted access to credit for many households and small businesses, the still-depressed housing market, tight fiscal policy at all levels of government, and some slowing in global economic growth."

Our overall take from the region, based on the incoming data from the Southeast and what our business contacts are telling us, leads us to believe that the economy is gaining some traction and that this momentum should carry forward through 2012 and result in continued, modest increases in economic activity. Caution regarding the outlook was clear. While concerns about a potential spillover from financial events in Europe appear to have subsided, there was growing unease regarding the impact of rising gasoline prices.

Below are sector overviews from the Sixth District's Beige Book:

  • Retailers noted that sales and traffic increased compared with a year ago and auto sales remained robust. Hospitality contacts, with the exception of cruise lines, reported strong bookings for this year.
  • Homebuilders and brokers reported that unseasonably warm weather has helped bolster residential real estate activity by pulling some activity forward. Nonetheless, overall home sales and construction levels remained weak apart from the generally robust multifamily sector.
  • Manufacturers and transportation contacts continued to note positive activity on balance.
  • Bankers reported a modest improvement in loan activity at larger institutions.
  • More firms reported increased hiring, although contacts continued to signal they approached hiring decisions very cautiously.
  • Concerns over increased input costs generally eased as most firms reported that input prices leveled off. Only a few contacts reported having significant pricing power.
  • Contacts in the energy exploration sector noted that recent lease auctions have helped stimulate more industry optimism, contributing to an improvement in investment conditions.
  • Agriculture sector contacts reported that some farmers in Alabama and Georgia were reviewing their planting plans in light of their concerns of labor shortages.

Photo of Michael Chriszt By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

February 28, 2012

Georgia outlook update

On February 22, the Economic Forecasting Center at Georgia State University's J. Mack Robinson College of Business held its first quarterly conference focusing on the outlook for the local, state, and national economies.

According to GSU's forecast, the ongoing fiscal and financial challenges in Europe, rising energy prices, cautious U.S. consumers, and weak corporate confidence are the headwinds that Georgia's economy will face in 2012 and 2013. Rajeev Dhawan, director of GSU's Economic Forecasting Center in the Robinson College, reported that gains in growing sectors—such as professional and business services, manufacturing, and healthcare services—have not been great enough to offset losses in lagging sectors such as construction, local government, and banking.

Here are some highlights from the GSU Economic Forecasting Center's report for Georgia and Atlanta:

  • Georgia will add 14,300 jobs, including 2,500 premium jobs, in calendar year 2012. Employment levels will improve in 2013, when the state will add 40,600 jobs, of which 7,200 are premium jobs (resulting in a 0.8 percent annual growth rate). In 2014, the recovery will be better but still moderate, with the economy adding 66,700 jobs, 14,100 of which will be premium jobs (a 1.5 percent annual growth rate).

  • Georgia's unemployment rate will be 9.7 percent in 2012, only 0.3 basis points lower than 2011 levels. In 2013, unemployment will decline to 9.3 percent. In 2014, it will decline again significantly, to 8.5 percent.

  • Atlanta employment will mirror statewide conditions for calendar year 2012, with 10,300 job gains (2,900 premium jobs). Employment will grow in 2013, with the Atlanta economy adding 28,700 jobs (5,200 premium jobs). Atlanta employment will increase again in 2014 by 44,800 jobs (9,600 premium jobs).

  • Atlanta housing permits will increase by 12.6 percent in 2012 to 9,594 units as a result of a boost in multifamily housing permits (28.9 percent). Single-family permits will post a mild increase of 5.9 percent this year. Permit activity will increase by 17.1 percent in 2013, with single-family and multifamily housing activity posting increases of 11.7 percent and 27.8 percent, respectively. Permit activity will grow again in 2014, posting an overall increase of 22.4 percent, with multifamily permits growing at 31.6 percent.

In a recent speech, Atlanta Fed President Dennis Lockhart noted that he anticipates steady, moderate growth in the absence of potential shocks, a view similar to Dr. Dhawan's outlook for the state.

Photo of Michael Chriszt By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

January 19, 2012

Georgia on my mind (again)

You wouldn't think a breakfast talk about economics would be all that interesting. Not true. Yesterday morning, I participated in a monthly breakfast seminar hosted by a local group aptly called "Eggo-nomics." The discussion was about the current state of Georgia's economy.

I'm not saying that my presentation was all that enthralling, but the questions and comments from the participants certainly were interesting. Of the several questions I received, the most common centered on the theme of why Georgia's economy continues to lag other parts of the country.

As it so happens, these questions mirrored one that was posed to Atlanta Fed President Dennis Lockhart in a recent interview with the Atlanta Journal-Constitution. He was asked, "Certain areas of the country, like the Northeast, are recovering faster than the Southeast. Why?" Here is President Lockhart's response:

"I get the question frequently: 'How is the Southeast doing relative to the rest of the country?' And my answer is, broad generalization, a little worse than the national averages. Not dramatically worse, just a little worse. And I use unemployment as an example. The unemployment rates for the six states we follow here, with the exception of Louisiana, are above the national average.

"Those rates have been coming down, just as the rate nationally has been coming down. But there is a lagging picture for Georgia and for most of the Southeast. You can explain some of the cause by looking at the exposures in the bust which were real estate-oriented, the dramatic slowdown in construction and the number of people put out of work who were in the construction trades.

"And to some extent in banking [many of the problems stemmed from] the dependence on real estate lending in many banks.

"If you want to step back even further, you had a couple of decades of in-migration, particularly Atlanta. You have to build houses to hold the people who migrate here, so real estate construction was a big thing. They come and get jobs; they need office buildings in which to work. So commercial real estate is a big thing and when that turns negative, it creates a problem that is more difficult than in the Northeast service-industry contraction."

SouthPoint has reported on this topic and will continue to dig into reasons behind Georgia's lagging recovery.

Photo of Michael Chriszt Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

June 15, 2012

Capital expenditure plans for regional firms

We recently reached out to our regional business contacts to gauge their intentions regarding capital expenditures. The results of our regional survey showed that over half plan to increase capital spending over the next six to 12 months. Only 14 percent anticipate decreasing spending from current levels.


Of the businesses that planned to increase spending in the near term, high expected growth of sales and the need to replace information-technology equipment were the two most common factors driving their plans. Firms that commented in the "other factors" category cited expansions as reasons for increasing spending now. Decreased economic/financial uncertainty was the least cited factor.


Among the businesses that said they do not plan to increase spending in the near term, firms cited increased or high economic/financial uncertainty, limited need to replace capital goods, and low expected growth of sales as the major factors behind not increasing capital spending.


Indications are that the broader regional economy continues to grow at a modest pace, and the results from our recent capital expenditure poll appear to support that conclusion. Firms continue to invest, driven largely by expectations for improved sales. Those that have chosen to hold off noted that uncertainty is the main factor, so if the future becomes less cloudy we might expect further increases in capital spending.

Photo of Mike ChrisztBy Mike Chriszt, a vice president in the Atlanta Fed's research department


March 2, 2012

Atlanta Fed’s Beige Book shows an increase in regional economic activity

Eight times per year, each Federal Reserve Bank gathers anecdotal information on current economic conditions in its district through reports from Reserve Bank and branch directors and interviews with key business contacts, economists, market experts, and other sources. Results are published in the Beige Book on the Federal Reserve Board of Governors website. The Atlanta Fed's Regional Economic Information Network (REIN) provides a robust platform for compiling our Reserve Bank's contribution to the Beige Book.

We tend to see the our Beige Book exercise as a touch point for the middle of the Federal Open Market Committee's cycle, where we bring the intelligence gathered by our regional executives and other sources to our staff economists and Atlanta Fed President Dennis Lockhart. It helps inform our forecast for broader U.S. economic activity and gives President Lockhart the latest input from business and community leaders throughout the Southeast.

The latest Beige Book was published February 29. The opening sentence to the Atlanta Fed's latest Beige Book reads:

"Sixth District business contacts described economic activity as expanding at a somewhat stronger pace in January and early February compared with late last year. Expectations were generally more positive, although firms continued to express caution with regard to the outlook."

Importantly, the rising pace of economic activity in the region should not be viewed as evidence that the economy here is taking off. It is performing better, but it would be a mistake to interpret this improvement as a sign that the economy is firing on all cylinders. Our outlook is still rather tame.

President Lockhart noted this in his February 14 speech at New College of Florida in Sarasota:

"Not all the recent economic news has been uniformly positive, but the balance of incoming data has been rather upbeat. This gives me confidence in the view that economic growth in 2012 will be noticeably better than in 2011."

He continued:

"Significant unanticipated developments are part of economic life, but barring shocks, we at the Federal Reserve Bank of Atlanta expect 2.5 to 3 percent growth for 2012."

Fed Chairman Ben Bernanke struck a similar tone in the February 29 Monetary Policy Report to Congress:

"Looking ahead, growth is likely to be modest during the coming year, as several factors appear likely to continue to restrain activity, including restricted access to credit for many households and small businesses, the still-depressed housing market, tight fiscal policy at all levels of government, and some slowing in global economic growth."

Our overall take from the region, based on the incoming data from the Southeast and what our business contacts are telling us, leads us to believe that the economy is gaining some traction and that this momentum should carry forward through 2012 and result in continued, modest increases in economic activity. Caution regarding the outlook was clear. While concerns about a potential spillover from financial events in Europe appear to have subsided, there was growing unease regarding the impact of rising gasoline prices.

Below are sector overviews from the Sixth District's Beige Book:

  • Retailers noted that sales and traffic increased compared with a year ago and auto sales remained robust. Hospitality contacts, with the exception of cruise lines, reported strong bookings for this year.
  • Homebuilders and brokers reported that unseasonably warm weather has helped bolster residential real estate activity by pulling some activity forward. Nonetheless, overall home sales and construction levels remained weak apart from the generally robust multifamily sector.
  • Manufacturers and transportation contacts continued to note positive activity on balance.
  • Bankers reported a modest improvement in loan activity at larger institutions.
  • More firms reported increased hiring, although contacts continued to signal they approached hiring decisions very cautiously.
  • Concerns over increased input costs generally eased as most firms reported that input prices leveled off. Only a few contacts reported having significant pricing power.
  • Contacts in the energy exploration sector noted that recent lease auctions have helped stimulate more industry optimism, contributing to an improvement in investment conditions.
  • Agriculture sector contacts reported that some farmers in Alabama and Georgia were reviewing their planting plans in light of their concerns of labor shortages.

Photo of Michael Chriszt By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

February 28, 2012

Georgia outlook update

On February 22, the Economic Forecasting Center at Georgia State University's J. Mack Robinson College of Business held its first quarterly conference focusing on the outlook for the local, state, and national economies.

According to GSU's forecast, the ongoing fiscal and financial challenges in Europe, rising energy prices, cautious U.S. consumers, and weak corporate confidence are the headwinds that Georgia's economy will face in 2012 and 2013. Rajeev Dhawan, director of GSU's Economic Forecasting Center in the Robinson College, reported that gains in growing sectors—such as professional and business services, manufacturing, and healthcare services—have not been great enough to offset losses in lagging sectors such as construction, local government, and banking.

Here are some highlights from the GSU Economic Forecasting Center's report for Georgia and Atlanta:

  • Georgia will add 14,300 jobs, including 2,500 premium jobs, in calendar year 2012. Employment levels will improve in 2013, when the state will add 40,600 jobs, of which 7,200 are premium jobs (resulting in a 0.8 percent annual growth rate). In 2014, the recovery will be better but still moderate, with the economy adding 66,700 jobs, 14,100 of which will be premium jobs (a 1.5 percent annual growth rate).

  • Georgia's unemployment rate will be 9.7 percent in 2012, only 0.3 basis points lower than 2011 levels. In 2013, unemployment will decline to 9.3 percent. In 2014, it will decline again significantly, to 8.5 percent.

  • Atlanta employment will mirror statewide conditions for calendar year 2012, with 10,300 job gains (2,900 premium jobs). Employment will grow in 2013, with the Atlanta economy adding 28,700 jobs (5,200 premium jobs). Atlanta employment will increase again in 2014 by 44,800 jobs (9,600 premium jobs).

  • Atlanta housing permits will increase by 12.6 percent in 2012 to 9,594 units as a result of a boost in multifamily housing permits (28.9 percent). Single-family permits will post a mild increase of 5.9 percent this year. Permit activity will increase by 17.1 percent in 2013, with single-family and multifamily housing activity posting increases of 11.7 percent and 27.8 percent, respectively. Permit activity will grow again in 2014, posting an overall increase of 22.4 percent, with multifamily permits growing at 31.6 percent.

In a recent speech, Atlanta Fed President Dennis Lockhart noted that he anticipates steady, moderate growth in the absence of potential shocks, a view similar to Dr. Dhawan's outlook for the state.

Photo of Michael Chriszt By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

January 19, 2012

Georgia on my mind (again)

You wouldn't think a breakfast talk about economics would be all that interesting. Not true. Yesterday morning, I participated in a monthly breakfast seminar hosted by a local group aptly called "Eggo-nomics." The discussion was about the current state of Georgia's economy.

I'm not saying that my presentation was all that enthralling, but the questions and comments from the participants certainly were interesting. Of the several questions I received, the most common centered on the theme of why Georgia's economy continues to lag other parts of the country.

As it so happens, these questions mirrored one that was posed to Atlanta Fed President Dennis Lockhart in a recent interview with the Atlanta Journal-Constitution. He was asked, "Certain areas of the country, like the Northeast, are recovering faster than the Southeast. Why?" Here is President Lockhart's response:

"I get the question frequently: 'How is the Southeast doing relative to the rest of the country?' And my answer is, broad generalization, a little worse than the national averages. Not dramatically worse, just a little worse. And I use unemployment as an example. The unemployment rates for the six states we follow here, with the exception of Louisiana, are above the national average.

"Those rates have been coming down, just as the rate nationally has been coming down. But there is a lagging picture for Georgia and for most of the Southeast. You can explain some of the cause by looking at the exposures in the bust which were real estate-oriented, the dramatic slowdown in construction and the number of people put out of work who were in the construction trades.

"And to some extent in banking [many of the problems stemmed from] the dependence on real estate lending in many banks.

"If you want to step back even further, you had a couple of decades of in-migration, particularly Atlanta. You have to build houses to hold the people who migrate here, so real estate construction was a big thing. They come and get jobs; they need office buildings in which to work. So commercial real estate is a big thing and when that turns negative, it creates a problem that is more difficult than in the Northeast service-industry contraction."

SouthPoint has reported on this topic and will continue to dig into reasons behind Georgia's lagging recovery.

Photo of Michael Chriszt Mike Chriszt, an assistant vice president in the Atlanta Fed's research department