Atlanta Fed: Modest growth in Atlanta, across southeast U.S.
By David Pendered
A new round of economic reports indicates Atlanta and the rest of the southeast continue on a trajectory of “modest” growth.
Two new reports from Atlanta Federal Reserve portray the region’s economy in relatively good terms. These reports join the muddled mix that shows the foreclosure rate has fallen, while the number of workers in metro Atlanta has decreased and the number of unemployed has increased since the spring.
In particular, the Atlanta Fed observed that apartment construction remains “robust,” and commercial real estate brokers say demand has increased since the previous report. A separate report from the Atlanta Fed proclaimed good news in the headline: “Southeastern Manufacturing Continues to Expand.”
Manufacturing and transportation may be the bright spot of the current round of reports.
Manufacturers said the orders they received were increasing and that production was keeping pace. Factories expect the orders to continue increasing over the next three to six months, according to the Atlanta Fed’s Beige Book, which was released Oct. 15.
The transportation industry, which moves the manufacturers’ materials and finished products, also reported increasing demand since the last report. Railroads reported increased shipments of “petroleum products; grain; and military, machinery, and transportation equipment.” Ports reported increased shipments and trucking companies reported growth.
A separate report on the outlook of purchasing managers in the southeast was fairly upbeat. The purchasing managers index (PMI) actually fell from August to September, but the Atlanta Fed extracted another detail that presented the downgrade in a positive light:
- “Optimism among purchasing managers continued to rise during September. When asked for their production expectation over the next three to six months, 50 percent stated that they expect production to be higher, an increase from 44 percent in August. Only 18 percent of survey respondents expect their production to be lower.”
Meanwhile, even though consumers appear hesitant in the ramp-up to the winter holiday season, the Atlanta Fed portrays the region’s economy as improving. As stated in this introductory statement to its Beige Book:
- “Business contacts described economic conditions as improving at a modest pace in September. The outlook among firms remains largely optimistic with the majority of contacts expecting near-term growth to be sustained at or slightly above current levels.”
Incidentally, the Atlanta Fed covers a district that includes Georgia, Alabama, Florida, and portions of Louisiana, Mississippi, and Tennessee. The Beige Book reports represent a synthesis of reports from trusted contacts in various industries.
The Atlanta Fed’s report was cast in language that represented modesty.
All the industries cited in the report were portrayed as reporting at least “slight improvement,” as was the case with retail. Some categories, such as hospitality, reported, “strong activity, with increasing demand from both leisure and business travel.”
Apartment construction remains strong, according to the report that stated: “Multifamily construction, in particular, continued to increase across much of the district.”
Further in the report came this observation:
- “Commercial contractors reported that apartment construction remained robust. Contacts also noted that the level of construction activity across other property types continued to increase modestly. The outlook among District commercial real estate contacts remains fairly optimistic.”