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.
July 17, 2014
Continued Expansion Highlighted in Latest Beige Book
Eight times a year, the Fed's Board of Governors publishes the Beige Book. The report provides a summary of the latest economic conditions collected by each of the 12 Federal Reserve Banks. Looking at the first sentence of each region's section allows a quick and easy way to gauge how the nation is doing. Below is a compilation of these opening sentences from the latest report:
Boston: Reports on recent business performance in the First District display considerable variation both across and within sectors, but point to slow economic growth overall.
New York: Economic growth in the Second District has continued at a moderate pace since the last report.
Philadelphia: Aggregate business activity in the Third District grew at a modest pace during this current Beige Book period, with few changes from the prior period.
Cleveland: The Fourth District's economy expanded at a modest pace during the past six weeks. New orders and production at District factories grew slowly.
Richmond: The Fifth District economy grew modestly since our last report. Manufacturing conditions improved on balance in recent weeks.
Atlanta: On balance, reports from Sixth District business contacts suggest that economic activity expanded modestly in June and early July.
Chicago: Growth in economic activity remained moderate in June and contacts maintained their optimistic outlook for the rest of the year.
St. Louis: Economic activity in the Eighth District has increased modestly since the previous report.
Minneapolis: The Ninth District economy grew moderately since the last report.
Kansas City: The Tenth District economy expanded modestly in late May and June, and most contacts anticipated stronger growth in the months ahead.
Dallas: The Eleventh District economy grew at a moderate pace over the past six weeks. Manufacturing activity continued to increase, although there were a few reports of weaker demand.
As you can see, the nation's economy expanded overall. And just like the last report showed, the pace of economic expansion continued to increase moderately in the Southeast. Below are some highlights from the Atlanta Fed's section:
Employment and prices
Payrolls across the District continued to expand in June and early July, but at a slow pace. Wage growth remained in the 2-3 percent range, with the exception of some high-skill, low-supply fields. According to the Atlanta Fed's survey on business inflation expectations (BIE), firms' unit costs were up 1.9 percent on a year-over-year basis in June. (It's important to note that this figure was recently updated with new data. In the July BIE survey, firms' unit costs were up 1.8 percent year-over-year.)
Consumer spending and tourism
Since the last report, the consensus among District retailers was that sales growth picked up slightly, with several merchants indicating that customers spent more money per visit to their establishments than earlier in the year. District reports on tourism and business travel remained positive. Hospitality industry contacts expressed concerns that a rise in gas prices may adversely affect summer tourist activity.
Manufacturing and transportation
Manufacturers indicated that activity sustained the solid pace of growth noted in the previous report. New orders and production continued to increase, supplier delivery times slowed as demand for inputs rose, and commodity prices were elevated.
Real estate and construction
Fewer District brokers cited growth this period than in the previous report. Just over half of brokers indicated that home sales had increased from the year-earlier level, down from nearly two-thirds in June's report. On the other hand, reports from District builders remained fairly positive. Most contacts felt that recent activity either met or exceeded their plan for the period. The majority of builders indicated that construction and new home sales were ahead of the year-earlier level. Demand for commercial real estate continued to improve across most of the region. The outlook among District commercial real estate contacts remained positive, with most expecting activity to grow steadily through the summer months.
Banking and finance
Bankers continued to report increased competition and aggressive rates and loan structures. Contacts noted loan growth was strong over the last couple of months, with some of that growth coming from increased credit line usage. Banks continued to compete aggressively for quality borrowers, especially in small business lending. Mortgage demand in general was lower than last year.
Natural resources and agriculture
Gulf Coast refineries continued to run at near record levels, as they have for much of 2014. Refineries continued to invest in storage capacity to accommodate increased crude oil inventories flowing to the Gulf Coast from the Cushing, Oklahoma, hub.
While much of Tennessee, southwest Louisiana, and the southernmost tip of Florida continued to experience abnormally dry conditions, most of the District was not experiencing drought. Regional producers benefited from higher prices for many of their agricultural products, lower costs for feed and fertilizer, and a leveling off of fuel costs.
The Board will publish the next Beige Book on September 3.
By Sadat Karim, strategic information research analyst in the public affairs department of the Atlanta Fed
December 21, 2012
2013
Although these pages report on the regional economy, at the end of the day it's all about understanding what has happened and why, and with that knowledge hopefully contributing to the debate that leads to better outcomes. Sometimes the answers hide from view, but through the search we learn and—hopefully—apply the lessons learned. SouthPoint will spend the rest of the year reflecting on the lessons learned in 2012 and thinking about how best to apply them in 2013.
We'll also be spending time with our families, holding them a little closer, treasuring every moment a little more, and committing ourselves to be even more caring in the future.
Please accept our warmest wishes for a meaningful holiday season –
By Michael Chriszt, a vice president in the Atlanta Fed's research department
September 20, 2012
Southeastern Housing Update: A Closer Look at Lot Inventories
Southeastern housing contacts continued to report sales gains in August, even as home inventories remained below the year-earlier level. Reports from both builders and brokers indicated that home sales in August increased slightly compared with last year's levels, and buyer traffic remained strong (see the chart).
The majority of southeastern builders and brokers continued to report declining home inventories on a year-over-year basis (see the chart).
Builders continued to note increasing levels of new home construction in August. However, in recent months some have noted that finished lot supplies were tightening and could be problematic, so we queried our builder panel to get a better understanding of finished lot inventories (see the chart). Builder responses indicated that current finished lot inventories varied across the Southeast.
But it appears clear that finished lots will decline over the next six months (see the chart).
Based on comments from builders, finished lots will not be a constraining factor this spring, but shortages may materialize farther out, especially in the most desirable spots, known as "A" locations. Many contact indicated financing terms continue to be prohibitive for builders. Here is what some builders recently had to say:
- Atlanta—No "A" lots are available inside the Northern Perimeter. The only lots available are tear-downs. I am seeing houses that could be renovated, expanded, or torn down because, relatively, the risk-reward is better. No new lots are being developed that I have seen. The capital requirements are too extreme.
- North Georgia—Too many lots are in places that never should have been developed. Many will not sell to build on any time soon at any price. They need to be plowed up and make pasture for hay; this would be the only way to generate income off the land.
- Bessemer, Ala.—Most foreclosed lots in "A" locations have been gone for awhile. "B" locations are being taken now. "C" locations still exist and will need to move before any acquisition and development lending takes place for new projects.
- Birmingham, Ala.—There are lots to buy, but they have been picked over, and the ones left are less than desirable. New lots are not going to be developed due to banks not wanting to lend money, which in turn is heading down a road that will cause a lot shortage in a couple of years.
- Tuscaloosa, Ala.—Just finishing a small new subdivision, in a great location, and pricing the lots at a very reasonable price. However, trying to sell the lots is becoming more difficult than expected. Builders do not have access to borrow money to develop lot inventory, even on a small scale. I think most builders are afraid to get commitments for future purchases (due to no source for borrowing money).
- Jacksonville, Fla.—There are lots to buy but not many "A" lots left, mostly "C"/"D" or worse lots; some new lots being developed in pretty much only "A" locations. It is tough to develop lots because there is no debt financing available and equity is very expensive. Twenty percent–plus annual returns are required by equity investors.
- Tampa, Fla.—Almost no finished lots available in "A" or "B" locations. Plenty in "C" and "D" locations. We are developing lots in "A" locations.
- Brevard County, Fla.—The slight increase in activity in sales has influenced the consideration of developing new lots. If developed, new lots will have to sell for more than current inventory.
- Franklin, Tenn.—There are finished lots but they are spoken for in all of the "A" locations and most of the "B+" locations. There are not any new lots currently being developed of any significant numbers. The timing of delivering new lots takes almost a year. However, there are plenty of paper lots that will be developed by those that have acquired the finished lots mentioned above. It will be difficult to compete price wise. The biggest hurdle will be obtaining the acquisition and development financing from traditional banking sources.
- Nashville, Tenn.—The finished lot figures for the Nashville MSA [metropolitan statistical area] are skewed based on finished lots in "C" locations. The last four land deals that we have signed have been raw land deals in "A" locations.
- Knoxville, TN—From our perspective, we have finished lots available and significant interest in those areas to allow for homes to be built and sold. We would like to work through our current finished lots before pursuing new developments.
- New Orleans—There is a superabundance of developed lots. At the present absorption rate, no new lot development is expected for several years. Those lots that are changing hands are those sold by lenders at a fraction of what it cost to develop replacement lots.
Most builder and brokers continued to report modest annual home price gains in August (see the chart).
Overall, the outlook among Southeast builders and brokers remained positive. The majority of brokers and builders anticipate home sales over the next several months will be slightly ahead of the year-ago levels. Similarly, builders anticipate modest gains in construction activity.
Note: August poll results are based on responses from 64 residential brokers and 33 homebuilders and were collected September 4–12, 2012. 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 while negative values indicate decreased activity.
By Whitney Mancuso, a senior analyst in the Atlanta Fed's research department
August 9, 2012
Plugging Into the Network
Plugging into the network is a great way to keep up with developments in the economy. And I'm not only referring to a computer network, although that's an essential tool and you can find lots of great resources on the Atlanta Fed's website. I also mean a network of people.
My network recently expanded to include the Atlanta Economic Club (AEC). The AEC is the Atlanta chapter of the National Association of Business Economists (NABE). Our monthly meetings are a great way to plug into the people network. You can find a list of local affiliates on the NABE website. There are also a number of events sponsored by local chambers of commerce, business associations, community and economic development agencies, and universities that are excellent opportunities to learn about what's happening in your local economy.
The people whom I've met are not policy wonks and data nerds like me (although some do share my affliction to some degree); rather, they are folks who simply want to learn more about what is going on in the economy. And we learn not only from the formal presentations that take place at these events, but also simply by spending time talking and listening to people who share similar interests.
A middle ground between the computer network and the people network exists in the world of economics. I'm referring to the economics blogosphere. Plugging into this network has no geographic limits and exposes readers to the latest thinking of some of the world's leading economists. Most economics bloggers invite comments that can lead to thoughtful discussions. A substantial list of economics blogs can be found on the NABE website. I'd be remiss if I didn't note the Atlanta Fed's macroblog, which is widely recognized as one of the most thoughtful economics blogs out there. Also, in addition to SouthPoint, other Reserve Banks write about regional economic conditions. For example, the Chicago Fed comments on its regional economy in its "Midwest Economy" blog.
At the end of the day, we can learn only so much from data and economic models. Listening to, and learning from, each other are just as important. Whether you do it via the computer network through the blogosphere, or through the people network by joining a local club like the AEC, it is time well spent.
By Mike Chriszt, a vice president in the Atlanta Fed's research department
July 17, 2014
Continued Expansion Highlighted in Latest Beige Book
Eight times a year, the Fed's Board of Governors publishes the Beige Book. The report provides a summary of the latest economic conditions collected by each of the 12 Federal Reserve Banks. Looking at the first sentence of each region's section allows a quick and easy way to gauge how the nation is doing. Below is a compilation of these opening sentences from the latest report:
Boston: Reports on recent business performance in the First District display considerable variation both across and within sectors, but point to slow economic growth overall.
New York: Economic growth in the Second District has continued at a moderate pace since the last report.
Philadelphia: Aggregate business activity in the Third District grew at a modest pace during this current Beige Book period, with few changes from the prior period.
Cleveland: The Fourth District's economy expanded at a modest pace during the past six weeks. New orders and production at District factories grew slowly.
Richmond: The Fifth District economy grew modestly since our last report. Manufacturing conditions improved on balance in recent weeks.
Atlanta: On balance, reports from Sixth District business contacts suggest that economic activity expanded modestly in June and early July.
Chicago: Growth in economic activity remained moderate in June and contacts maintained their optimistic outlook for the rest of the year.
St. Louis: Economic activity in the Eighth District has increased modestly since the previous report.
Minneapolis: The Ninth District economy grew moderately since the last report.
Kansas City: The Tenth District economy expanded modestly in late May and June, and most contacts anticipated stronger growth in the months ahead.
Dallas: The Eleventh District economy grew at a moderate pace over the past six weeks. Manufacturing activity continued to increase, although there were a few reports of weaker demand.
As you can see, the nation's economy expanded overall. And just like the last report showed, the pace of economic expansion continued to increase moderately in the Southeast. Below are some highlights from the Atlanta Fed's section:
Employment and prices
Payrolls across the District continued to expand in June and early July, but at a slow pace. Wage growth remained in the 2-3 percent range, with the exception of some high-skill, low-supply fields. According to the Atlanta Fed's survey on business inflation expectations (BIE), firms' unit costs were up 1.9 percent on a year-over-year basis in June. (It's important to note that this figure was recently updated with new data. In the July BIE survey, firms' unit costs were up 1.8 percent year-over-year.)
Consumer spending and tourism
Since the last report, the consensus among District retailers was that sales growth picked up slightly, with several merchants indicating that customers spent more money per visit to their establishments than earlier in the year. District reports on tourism and business travel remained positive. Hospitality industry contacts expressed concerns that a rise in gas prices may adversely affect summer tourist activity.
Manufacturing and transportation
Manufacturers indicated that activity sustained the solid pace of growth noted in the previous report. New orders and production continued to increase, supplier delivery times slowed as demand for inputs rose, and commodity prices were elevated.
Real estate and construction
Fewer District brokers cited growth this period than in the previous report. Just over half of brokers indicated that home sales had increased from the year-earlier level, down from nearly two-thirds in June's report. On the other hand, reports from District builders remained fairly positive. Most contacts felt that recent activity either met or exceeded their plan for the period. The majority of builders indicated that construction and new home sales were ahead of the year-earlier level. Demand for commercial real estate continued to improve across most of the region. The outlook among District commercial real estate contacts remained positive, with most expecting activity to grow steadily through the summer months.
Banking and finance
Bankers continued to report increased competition and aggressive rates and loan structures. Contacts noted loan growth was strong over the last couple of months, with some of that growth coming from increased credit line usage. Banks continued to compete aggressively for quality borrowers, especially in small business lending. Mortgage demand in general was lower than last year.
Natural resources and agriculture
Gulf Coast refineries continued to run at near record levels, as they have for much of 2014. Refineries continued to invest in storage capacity to accommodate increased crude oil inventories flowing to the Gulf Coast from the Cushing, Oklahoma, hub.
While much of Tennessee, southwest Louisiana, and the southernmost tip of Florida continued to experience abnormally dry conditions, most of the District was not experiencing drought. Regional producers benefited from higher prices for many of their agricultural products, lower costs for feed and fertilizer, and a leveling off of fuel costs.
The Board will publish the next Beige Book on September 3.
By Sadat Karim, strategic information research analyst in the public affairs department of the Atlanta Fed
December 21, 2012
2013
Although these pages report on the regional economy, at the end of the day it's all about understanding what has happened and why, and with that knowledge hopefully contributing to the debate that leads to better outcomes. Sometimes the answers hide from view, but through the search we learn and—hopefully—apply the lessons learned. SouthPoint will spend the rest of the year reflecting on the lessons learned in 2012 and thinking about how best to apply them in 2013.
We'll also be spending time with our families, holding them a little closer, treasuring every moment a little more, and committing ourselves to be even more caring in the future.
Please accept our warmest wishes for a meaningful holiday season –
By Michael Chriszt, a vice president in the Atlanta Fed's research department
September 20, 2012
Southeastern Housing Update: A Closer Look at Lot Inventories
Southeastern housing contacts continued to report sales gains in August, even as home inventories remained below the year-earlier level. Reports from both builders and brokers indicated that home sales in August increased slightly compared with last year's levels, and buyer traffic remained strong (see the chart).
The majority of southeastern builders and brokers continued to report declining home inventories on a year-over-year basis (see the chart).
Builders continued to note increasing levels of new home construction in August. However, in recent months some have noted that finished lot supplies were tightening and could be problematic, so we queried our builder panel to get a better understanding of finished lot inventories (see the chart). Builder responses indicated that current finished lot inventories varied across the Southeast.
But it appears clear that finished lots will decline over the next six months (see the chart).
Based on comments from builders, finished lots will not be a constraining factor this spring, but shortages may materialize farther out, especially in the most desirable spots, known as "A" locations. Many contact indicated financing terms continue to be prohibitive for builders. Here is what some builders recently had to say:
- Atlanta—No "A" lots are available inside the Northern Perimeter. The only lots available are tear-downs. I am seeing houses that could be renovated, expanded, or torn down because, relatively, the risk-reward is better. No new lots are being developed that I have seen. The capital requirements are too extreme.
- North Georgia—Too many lots are in places that never should have been developed. Many will not sell to build on any time soon at any price. They need to be plowed up and make pasture for hay; this would be the only way to generate income off the land.
- Bessemer, Ala.—Most foreclosed lots in "A" locations have been gone for awhile. "B" locations are being taken now. "C" locations still exist and will need to move before any acquisition and development lending takes place for new projects.
- Birmingham, Ala.—There are lots to buy, but they have been picked over, and the ones left are less than desirable. New lots are not going to be developed due to banks not wanting to lend money, which in turn is heading down a road that will cause a lot shortage in a couple of years.
- Tuscaloosa, Ala.—Just finishing a small new subdivision, in a great location, and pricing the lots at a very reasonable price. However, trying to sell the lots is becoming more difficult than expected. Builders do not have access to borrow money to develop lot inventory, even on a small scale. I think most builders are afraid to get commitments for future purchases (due to no source for borrowing money).
- Jacksonville, Fla.—There are lots to buy but not many "A" lots left, mostly "C"/"D" or worse lots; some new lots being developed in pretty much only "A" locations. It is tough to develop lots because there is no debt financing available and equity is very expensive. Twenty percent–plus annual returns are required by equity investors.
- Tampa, Fla.—Almost no finished lots available in "A" or "B" locations. Plenty in "C" and "D" locations. We are developing lots in "A" locations.
- Brevard County, Fla.—The slight increase in activity in sales has influenced the consideration of developing new lots. If developed, new lots will have to sell for more than current inventory.
- Franklin, Tenn.—There are finished lots but they are spoken for in all of the "A" locations and most of the "B+" locations. There are not any new lots currently being developed of any significant numbers. The timing of delivering new lots takes almost a year. However, there are plenty of paper lots that will be developed by those that have acquired the finished lots mentioned above. It will be difficult to compete price wise. The biggest hurdle will be obtaining the acquisition and development financing from traditional banking sources.
- Nashville, Tenn.—The finished lot figures for the Nashville MSA [metropolitan statistical area] are skewed based on finished lots in "C" locations. The last four land deals that we have signed have been raw land deals in "A" locations.
- Knoxville, TN—From our perspective, we have finished lots available and significant interest in those areas to allow for homes to be built and sold. We would like to work through our current finished lots before pursuing new developments.
- New Orleans—There is a superabundance of developed lots. At the present absorption rate, no new lot development is expected for several years. Those lots that are changing hands are those sold by lenders at a fraction of what it cost to develop replacement lots.
Most builder and brokers continued to report modest annual home price gains in August (see the chart).
Overall, the outlook among Southeast builders and brokers remained positive. The majority of brokers and builders anticipate home sales over the next several months will be slightly ahead of the year-ago levels. Similarly, builders anticipate modest gains in construction activity.
Note: August poll results are based on responses from 64 residential brokers and 33 homebuilders and were collected September 4–12, 2012. 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 while negative values indicate decreased activity.
By Whitney Mancuso, a senior analyst in the Atlanta Fed's research department
August 9, 2012
Plugging Into the Network
Plugging into the network is a great way to keep up with developments in the economy. And I'm not only referring to a computer network, although that's an essential tool and you can find lots of great resources on the Atlanta Fed's website. I also mean a network of people.
My network recently expanded to include the Atlanta Economic Club (AEC). The AEC is the Atlanta chapter of the National Association of Business Economists (NABE). Our monthly meetings are a great way to plug into the people network. You can find a list of local affiliates on the NABE website. There are also a number of events sponsored by local chambers of commerce, business associations, community and economic development agencies, and universities that are excellent opportunities to learn about what's happening in your local economy.
The people whom I've met are not policy wonks and data nerds like me (although some do share my affliction to some degree); rather, they are folks who simply want to learn more about what is going on in the economy. And we learn not only from the formal presentations that take place at these events, but also simply by spending time talking and listening to people who share similar interests.
A middle ground between the computer network and the people network exists in the world of economics. I'm referring to the economics blogosphere. Plugging into this network has no geographic limits and exposes readers to the latest thinking of some of the world's leading economists. Most economics bloggers invite comments that can lead to thoughtful discussions. A substantial list of economics blogs can be found on the NABE website. I'd be remiss if I didn't note the Atlanta Fed's macroblog, which is widely recognized as one of the most thoughtful economics blogs out there. Also, in addition to SouthPoint, other Reserve Banks write about regional economic conditions. For example, the Chicago Fed comments on its regional economy in its "Midwest Economy" blog.
At the end of the day, we can learn only so much from data and economic models. Listening to, and learning from, each other are just as important. Whether you do it via the computer network through the blogosphere, or through the people network by joining a local club like the AEC, it is time well spent.
By Mike Chriszt, a vice president in the Atlanta Fed's research department
Southpoint Search
Recent Posts
Categories
- Agriculture
- Alabama
- Atlanta
- Automobiles
- Banks and banking
- Beige Book
- Business Cycles
- Commodity Prices
- Construction
- Consumer Savings
- Data Releases
- Disaster recovery
- Economic conditions
- Economic Growth and Development
- Economic Indicators
- Economy
- Education
- Employment
- Energy
- Entertainment
- Europe
- Exports
- Fiscal Policy
- Florida
- Forecasting
- Forecasts
- Foreclosure
- Forestry
- GDP
- Georgia
- Green
- Growth
- Gulf Coast
- Health Care
- Holiday
- Holiday Sales
- Housing
- Hurricanes
- Inflation
- International
- Inventories
- Jobs
- Katrina
- Labor Markets
- Local Economic Analysis and Research Network LEARN
- Logistics
- Louisiana
- Manufacturing
- Metropolitan
- Mississippi
- Monetary Policy
- Nashville
- Natural Disasters
- New Orleans
- Oil
- Oil Spill
- Outlook
- Poultry
- Prices
- Productivity
- Purchasing
- Real Estate
- Recession
- Recovery
- Retail
- Rural
- Sales Tax
- Shipping
- Southeast
- Sports
- Taxes
- Technology
- Tennessee
- Tourism
- Trade
- Transportation
- Travel
- Uncategorized
- Unemployment
- Weather