Tracking Slow, Painful Progress
The region has clearly made progress in reducing the number of unemployed. In January of 2012, the six states in the Sixth Federal Reserve District had a combined total of 2,351,000 unemployed persons and an aggregated unemployment rate of 10.5 percent. By April 2013, the total number unemployed had declined to 1,731,000 and the region’s unemployment rate had fallen to 7.5 percent.
Here’s another way to look at the unemployment issue: Before unemployment began to increase in 2007, the region had a total of 904,000 unemployed. As noted above, in April more than 1.7 million people were still out of work, meaning that 872,500 more people are unemployed now than there were before the recession.
Even if we believe that labor markets were abnormally tight before the recession and that we shouldn’t use the 2005–06 period as a benchmark for what “normal” levels of unemployment would be in an economy exhibiting healthy, sustainable growth rates, a look at unemployment rates since 1990 shows that the current unemployment is still relatively high. From 1990 through 2006, the region’s aggregated average unemployment rate was 5.4 percent. That level is a bit higher than the low of 4 percent reached in early 2007 but still above the latest reading of 7.5 percent. A look at individual states shows that, for most areas in the region, unemployment remains high.
So while unemployment rates have come down and the number of unemployed may not be as high as it was a few years ago, the region is still suffering from higher-than-average unemployment. Progress has been real, but there is still a lot of pain out there.
To keep up to date with the latest on labor market developments, please see the Atlanta Fed’s Center for Human Capital Studies, which is home to several unique tools to track developments in national and regional employment trends. These tools include the Jobs Calculator, which calculates the net employment change needed to achieve a target unemployment rate after a specified number of months. The user can adjust the target unemployment rate, the number of months, and the assumed labor force growth. We have also recently added the Labor Market Spider Chart, a great tool designed to allow real-time tracking or monitoring of broad labor market developments by comparing current conditions with those in the fourth quarters of 2007 (the prerecession peak) and 2009 (the postrecession trough in employment). Finally, see our Human Capital Compendium, which is a repository of research published since 2008 by the Federal Reserve Board of Governors and all 12 Reserve Banks on topics related to employment, unemployment, and workforce development.
By Mike Chriszt, a vice president in the Atlanta Fed’s public affairs department
Regional Manufacturing Expansion Slows
The Southeast Purchasing Managers Index (PMI) experienced a decrease in May as a result of slowing new orders, production, and finished inventory. Nonetheless, manufacturing contacts in the Southeast report continued expansion for the fifth consecutive month this year.
The Southeast PMI is produced by the Econometric Center at Kennesaw State University and provides an analysis of the most current market conditions for the manufacturing sector in Alabama, Georgia, Florida, Louisiana, Mississippi, and Tennessee. The index is based on a survey of representatives from companies in those states regarding trends and activity of new orders, production, employment, supplier delivery time, and finished goods. A reading on this index above 50 represents an expansion in the manufacturing sector, and a reading below 50 indicates a contraction.
The regional PMI Index fell to 53.2 in May, which was a 2.3 point decrease from the previous month's reading of 55.5. Despite experiencing a slight slowing in the rate in which the manufacturing sector is growing in the region, the Southeastern PMI continues to report expansion, while the national PMI dropped below the benchmark of 50 points to 49 to indicate a slight contraction. As mentioned in last month's SouthPoint post regarding manufacturing, while the Southeast PMI is not a subset of the national PMI, both measure a mix of similar components by surveying purchasing managers.
Decreases in new orders, production, and finished inventory led to the overall decline in the regional index last month. New orders and production continued to report expansion readings, which in May were 53.4 and 55.1, respectfully, while finished inventories fell short at 46.6. Of those surveyed, 7.3 percent fewer respondents reported higher finished inventories, and 1.2 percent responded experiencing lower finished inventories. The index component—in which survey participants welcome a decline—is in the commodity prices submeasure, which decreased 2.5 points to 47.5, the lowest reading for the submeasure in 2013. Although in general commodity prices have declined, the prices of certain commodities have moved higher over the past year. Contacts in our Regional Economic Information Network reported manufacturers that supply the construction industry have experienced price pressures as the housing market recovers, and those using petroleum-based materials continue to adjust to the commodity's volatile nature. Anecdotally, a global manufacturing contact located in the Atlanta Fed's district recently broadly speculated that inventories may build as manufacturers take advantage of favorable commodity prices.
Of survey participants, 31 percent expect production to be higher in the next three to six months versus 43 percent for the prior survey period. While optimism from survey participants fell for the near term, the outlook index remains in expansive territory at 52 points. Hopefully, the survey participants' outlook will be accurate, and manufacturing activity in the Southeast will continue to reflect expansion in the months ahead.
By Amy Pitts, a senior Regional Economic Information Network analyst in the Atlanta Fed's Nashville Branch
Explaining and Connecting
Having worked at the Atlanta Fed for nearly a quarter of a century, I think I understand the Bank’s place in the Federal Reserve System and its role in contributing to the nation’s monetary policy making process pretty well. Realizing that not everyone has this insider’s view, our research and public affairs departments collaborated on a short animated video, “The Fed Explains Regional Banks,” to explain how the Federal Reserve's decentralized structure helps the central bank form a "big picture" view of the U.S. economy.
The latest video, along with others in the series, is part of The Fed Explained feature on the Bank’s website. The page brings together publications, videos, and other content to shed light on the Fed’s work and help a general audience understand key economic concepts.
Each of the Atlanta Fed’s six offices contributes to national monetary policy making by gathering grassroots information about economic conditions across the Southeast. The systematic approach we use here in the Sixth Federal Reserve District is known as REIN, or the Regional Economic Information Network.
In addition to the resources that REIN provides through the Bank’s website, there are other ways to connect with the Atlanta Fed, including subscribing to regular emails that highlight new content. These include speeches by Atlanta Fed President Dennis Lockhart and economic commentary from research director Dave Altig through his avidly followed macroblog. You can also request a speaker for an event: Atlanta Fed staff economists and regional executives give hundreds of presentations each year throughout the Southeast.
The Atlanta Fed’s role in the national monetary policy making process and our broader outreach efforts are part of the Bank’s overall strategy to inform and engage the public regarding Federal Reserve roles and policy decisions. We also strive to promote transparency and accountability on behalf of the nation’s central bank. Being viewed as an unbiased, straight-shooting resource of choice for the citizens of the Southeast, and across the country, is what our outreach efforts are all about.
By Mike Chriszt, a vice president in the Atlanta Fed’s public affairs department
Turning through the New Beige Book
Eight times a year, each of the 12 Reserve Banks gathers anecdotal information on current economic conditions in its district through reports from 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 approximately two weeks prior to each Federal Open Market Committee meeting.
Because the lead sentence often gives a broad view of economic conditions in that region, that first sentence of the national summary and each Bank's report often gets much attention. Here is a roundup of each report’s first sentence:
- National: Overall economic activity increased at a modest to moderate pace since the previous report across all Federal Reserve Districts except the Dallas District, which reported strong economic growth.
- Boston: First District business contacts generally report year-over-year increases in economic activity.
- New York: Economic activity in the Second District has continued to expand at a moderate pace since the last report.
- Philadelphia: After many months at a generally more modest pace of growth, aggregate business activity in the Third District has accelerated somewhat to a moderate pace of growth during this current Beige Book period.
- Cleveland: The economy in the Fourth District grew at a moderate pace since our last report.
- Richmond: Economic activity strengthened modestly across the District.
- Atlanta: On balance, Sixth District business conditions improved modestly in April and May.
- Chicago: Economic activity in the Seventh District again expanded at a modest pace in April and May.
- St. Louis: Economic activity in the Eighth District has expanded at a moderate pace since the previous report.
- Minneapolis: The Ninth District economy posted moderate growth.
- Kansas City: The Tenth District economy grew at a modest pace in late April and early May.
- Dallas: The Eleventh District economy expanded at a stronger pace over the past six weeks than in the previous reporting period.
- San Francisco: Economic activity in the Twelfth District expanded at a modest pace during the reporting period of early April through late May.
As you can see, almost all districts are experiencing the same level of economic activity.
Here are some notable highlights from the Atlanta Fed's portion of the Beige Book:
Consumer spending and tourism
- District retail contacts noted an improvement in consumer spending but were cautiously optimistic regarding their outlook. Automobile sales remained steady at high levels.
- Leisure and international travel continued to experience healthy demand, with several contacts reporting that activity exceeded expectations.
Real estate and construction
- District brokers reported that existing home sales remained ahead of last year’s level. Brokers continued to report that low home inventories were restraining sales. Existing home prices continued to rise on a year-over-year basis.
- District homebuilders reported that new home sales and construction activity were stronger than in our last report and from a year ago. Buyer traffic continued to increase, as well. Most contacts reported that new home inventories were below the year earlier level and prices have risen slightly.
- District commercial real estate contacts indicated that demand continued to improve from earlier in the year. Construction activity rose modestly again.
- District manufacturers continued to report expanding activity in April and May. Growth was driven by increases in new orders, production, and employment.
Banking and finance
- Overall demand for new loans remained weak.
- District payrolls grew at a mild pace since our last report.
Prices and wages
- Most firms continued to experience fairly stable input costs. Though most firms continued to report having little pricing power, retailers indicated that profit margins continued to improve since the beginning of the year as they have been able to successfully contain costs.
The next Beige Book will be published July 17.
By Shalini Patel, an economic policy analysis specialist in the Atlanta Fed's research department
Barons' Help Brightens Birmingham
On April 10, 2013, the Birmingham Barons opened the season at their new location in downtown Birmingham. The new stadium is part of a revitalization effort, built around Railroad Park, which opened in the fall of 2010. The area comprising the Railroad Park and Regions Field is now being referred to as Parkside. The immediate success of the park represents further progress for the city and has changed the minds of many cynics.
The majority of the properties acquired for the ballpark were obtained through a land swap with the University of Alabama at Birmingham (UAB), and the remaining parcels were purchased from private landholders. The ballpark's official groundbreaking ceremony was on February 2, 2012. As reported in The Birmingham News, Birmingham is paying $3.65 million a year over 30 years in annual debt service on the stadium bonds. Bonds were funded by a 3.5 percent increase in the city's lodging tax.
According to the Regional Economic Growth Report from the Birmingham Business Alliance, Birmingham had strong growth in 2012, with 70 companies announcing 3,831 jobs and $843 million in capital investment in the region's primary business sectors. This growth was a substantial improvement over 2011, and local business leaders anticipate Regions Field to be an economic engine behind continued growth.
Overall conditions in the Birmingham metro area have improved since the recession ended, but employment growth had stagnated for much of the past year. But in March and April, Birmingham added 2,400 new jobs. Meanwhile, the area's unemployment rate declined from 6.5 percent to 6.2 percent over the same period.
Also, the Birmingham Business Journal reported that Birmingham jumped 27 spots on the On Numbers Economic Index in May. This number is compiled by American City Business Journals and is formulated from an 18-part measurement system that includes factors such as private-sector job growth, unemployment, construction, and retail activity and earnings.
While the lasting economic impact on the city will not be known for some time, all indications are that the new development will be very positive. According to sources at Regions Field, they have more than doubled the amount of full and part-time staff since their move from Hoover, the Birmingham suburb where the Barons played until this year, and will probably hire more concessions staff as the season progresses. The local brewery has doubled its staff as well. Robert Emerick of REV Birmingham, an economic development organization, says that with renovations, land purchases, residential development, and grants, the immediate estimated impact is approximately $72 million.
Opening day in April was a sellout, and the Barons triumphed over the Mississippi Braves (sorry, Atlanta). The season is going very well with the Barons in first place of the Southern League's North Division, and the future of Parkside is indeed very bright.
By Susan Remy, a Regional Economic Information Network analyst in the Atlanta Fed's Birmingham Branch
Regional Job Growth Helps Ward off Another Spring Swoon
Over the course of the relatively lethargic labor market recovery, both regional and national labor markets have made painfully slow, but fairly steady, improvements in the pace of job creation. However, for the three years prior to 2013, there emerged a phenomenon many have come to label a “spring swoon,” whereby in the spring/summer of every calendar year since 2010, headwinds—or specters of headwinds—have appeared, at least for a short time, that made many fear the bottom could be falling out of the economic recovery. With headwinds aplenty over the last few years, one can’t be blamed for being a bit cautious in the wake of some uninspiring economic data reports.
But—cross your fingers—maybe there’s a little less concern about a dip in labor markets this spring. Maybe this time, in 2013, regional labor markets are a bit more resilient after a few years of painful realignment.
Through April, the states in the Sixth Federal Reserve District have added roughly 127,000 net new jobs, according to data from the U.S. Bureau of Labor Statistics (BLS). Before we begin to cheer a possible end to the spring swoon phenomenon, however, we should check out a recent Wall Street Journal blog claiming the entire concept is a myth brought on by changing hiring patterns, a misaligned seasonal adjustment procedure by the BLS, and weaker hiring by small businesses.
Let’s take a look back at these so-called swoons. Although not a spring swoon, Sixth District states collectively shed 61,500 payrolls from June to September 2010. The sputtering regional labor market found more solid ground after September 2010 and carried over some momentum into 2011. Then in May and June 2011, the region shed 25,000 payrolls over the two-month period. However, the sharp downward lines on my graphs turned the other way, and fears were once again alleviated, at least temporarily.
But then in 2012, in another twist of fate, when economists were watching with near anticipation for the seasonal dip to return, the swoon reared its ugly head once again. Fortunately, this was the least dramatic one since the recession. Jobs were shed in May and July 2012 to the tune of 11,600 payrolls in the Southeast before returning to a positive trajectory.
Once again, earlier this year, as one might suspect, many economists were wondering if we would see another swoon. In fact, some preliminary data from the BLS had many believing more of the same was surely on the way, but with upward revisions announced on May 3 by the BLS reflecting a much more positive labor situation for March and April than was originally reported, major newspapers began running headlines such as “Investors Throw Off Fears of Spring Swoon.”
And now, this hopeful warding off of another spring swoon nationally seems also to be materializing in Sixth District labor markets. In April 2013, Sixth District states added a net 32,400 new jobs, after tacking on 36,000 in March. Additionally, though the size of each state’s contribution varied, every state in the region added payrolls in April.
Where and what kinds of jobs?
Florida has led the way in payroll growth over the last two months within the Sixth District, adding nearly 25,000 payrolls in March and 17,000 in April. Importantly, the gains were broad-based: retail, financial activities, professional and business services, and leisure and hospitality sectors have helped the Sunshine State bounce back with vigor over the last two months. Construction (+12,500 payrolls for March and April) and real estate (almost +4,000 new payroll jobs for March and April) reflect an ongoing rebound in the housing sector. Add to this the fact that Florida is one of only a few states where there is considerably less of an employment payroll drag from the government sector.
As a native Georgian, I have become accustomed to being one or two pegs below Florida in everything from the alphabet to college sports, so it’s not too surprising that Georgia has undergone the second highest rate of payroll creation over the last two months within the Sixth District. A few noticeable differences exist between the makeup of the new jobs in these two states, though. In Georgia, construction jobs are making their way back into the fray at a much slower pace than Florida (+2,000 for March and April), while payrolls in the real estate, rental, and leasing industries have been flat over the last two months of data. Leading the way in the Peach State is professional and business services, as industries in those sectors have added 12,000 payrolls over the last two months, March and April.
Still, 7.5 percent unemployment isn’t exactly something to celebrate
There was more news in last week’s regional employment report from the BLS. Much like how the BLS conducts two national surveys each month (one to calculate the change in payrolls, the other to calculate the unemployment rate), so it does on a regional level. In the April 2013 Regional Report, we discovered that an aggregate of Sixth District states now has the same unemployment rate as the rest of the nation for the month of April, 7.5 percent. While this may not yet seem like the time to uncork the champagne, it is worth noting that the Sixth District’s aggregate unemployment rate had been above the national average since February 2008, just around the time that everyone’s labor market nightmares began coming true.
Other significant changes in unemployment rates for the Sixth District in April included drops of 0.3 percentage point in Alabama, Florida, and Mississippi to reach 6.9 percent, 7.2 percent, and 9.1 percent, respectively. Louisiana, though it tacked on 0.3 percentage point to its unemployment rate in April, remains the lowest unemployment rate in the Sixth District at 6.5 percent. The chart below shows the historical trends for the Sixth District unemployment rate, the national rate of unemployment, and unemployment rates for each of our Sixth District states.
By Mark Carter, a senior economist analyst in the Atlanta Fed’s research department
Southeast Housing Update: Sales Continue to Rise despite Constraining Factors
The Atlanta Fed’s monthly poll of regional brokers indicates that home sales remained ahead of the year-earlier level during April. However, Florida brokers continued to report the strongest growth. As the chart below shows, all of the Florida brokers in our latest poll said that home sales exceeded the year-earlier level.
Reports from Southeast brokers outside of Florida were not quite as robust (see the chart). However, two-thirds reported that sales in April exceeded the year-earlier level.
Despite sales gains, Southeast brokers continued to note that sales were restrained by lack of inventory. Nearly 80 percent of Southeast brokers polled said that inventories were below the year-earlier level. Several described the housing market as very tight and said that buyers were finding it difficult to find homes. When buyers did find a home, they were urged to act quickly because many properties were receiving multiple offers. Brokers also noted that appraisals continued to be a problem: appraisals below market rates were delaying, and in some cases halting, sales. However, brokers indicated stronger year-over-year home price gains in April than earlier in the year.
Our poll of regional home builders indicates that new home markets in the Southeast continued to improve. More than two-thirds of the builders reported that sales in April were ahead of year-earlier levels, and many indicated that sales levels were “up significantly.” Construction activity appears to be tracking closely to new home sales, which are in line with the comments of builders that access to construction finance and shortages of lots restrained the new home market.
Builders continued to report new home price appreciation in April, with most indicating that new home prices rose “modestly.” At the same time, builders reported that material and labor costs continued to rise as well.
The outlook for sales among brokers and builders over the next several months remained positive and ahead of year-earlier expectations (see the charts).
Note: April poll results are based on responses from 45 residential brokers and 27 homebuilders and were collected May 6–15, 2013. 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.
If you are a real estate broker or homebuilder and would like to participate in this poll, please send a note to RealEstateCenter@atl.frb.org.
By Whitney Mancuso, a senior economic analyst in the Atlanta Fed’s Research Department
Nashville’s Music City Center: If You Build It, They Will Come
Borrowing and slightly altering a line from the movie Field of Dreams somewhat applies to Nashville’s high expectations for its new state-of-the-art convention center. The new downtown Nashville facility, aptly named “The Music City Center,” is scheduled to open May 19. Located in the heart of downtown Nashville and within walking distance of the famous Ryman Auditorium and the Country Music Hall of Fame, Nashville expects the convention center to serve as a catalyst for economic development by luring hundreds of thousands of visitors to the city each year. It will be the centerpiece for activity in an already lively downtown area.
The Nashville metropolitan statistical area is already riding a wave of employment expansion. Tennessee’s unemployment rate is slightly above the national rate; however, Nashville’s rate is more than a full percentage point lower. The city’s employment expanded 3.8 percent in 2012 and has expanded 16.6 percent since 2001. Throw a deep recession into the middle of that time frame, and the numbers are impressive. The city’s diverse economy, along with the state’s business friendly environment are just a couple of reasons why Forbes magazine recently ranked Nashville second to only San Francisco on its list of best cities for jobs in 2013.
The Music City Center (MCC) project was born in 2004 when metro Nashville government felt the city needed more convention space. In 2007, Nashville Mayor Karl Dean, along with local business leaders and community activists, pushed the project to the front of Nashville’s developmental priorities. The Metro Council of Nashville approved construction of the project in January 2010. Three years later, the grand opening is upon us.
The massive building, dubbed a “widescraper” due to its enormous footprint, covers four city blocks and is longer than 12 football fields. The building has a total of 1.2 million square feet, with a 350,000-square-foot exhibit hall, a 57,000-square-foot ballroom and 1,800 parking spaces. The center also features 60 meeting rooms and 32 docks to allow seamless loading for convention center exhibitors. The “Green Roof” is four acres of a grass-like plant called sedum. The roof also features the outline of—what else?—a guitar.
The Music City Center’s green roof and guitar motif (photo courtesy of the MCC)
The MCC’s economic benefits could also be significant and immediate. According to the Nashville Convention and Visitors Corporation, hotel room bookings for the center have already surpassed 800,000. The Omni is constructing an 800-room hotel adjacent to the MCC that has surpassed 250,000 nights booked, which is four months ahead of schedule. Another 18 hotel projects are under way or proposed in the downtown market.
The city has already seen a spike in hotel tax revenue because of an increase in leisure travel. A total of 101 meetings with dates ranging between 2013 and 2026 are now booked at the convention center, with another 300 considering Nashville for their meeting, according to Music City Center CEO Charles Starks. The annual impact is estimated to be about $200 million, with more than 1,500 jobs being added to the local economy. Business owners in the downtown area are counting on the new convention center to bring an array of visitors.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta (right), and Larry Atema of the Nashville Convention Center Authority tour the Music City Center.
Saying that Nashville has high hopes for the Music City Center is an understatement. The city has built a top-of-the-line facility to attract conventions from all across the nation. The project should add to Nashville’s growing economy.
Nashville built it and, based on early indications, they are indeed coming.
By Troy Balthrop, a Regional Economic Information Network analyst in the Atlanta Fed’s Nashville Branch
The Regional Housing Recovery: Where Are the Jobs?
We’ve been reporting for some time that our business contacts in the homebuilding industry were observing an increase in sales and construction. This growth is clear in the Atlanta Fed’s monthly Residential Construction and Real Estate poll and can be seen in the charts below.
With sales and construction of new homes on the rise, we should expect an increase in the number of workers employed in the construction industry. But these employment increases have not been readily observed. The chart below shows total construction employment for the six states in the Sixth Federal Reserve District. It has barely budged for the last three years.
Another way of looking at construction employment is to measure the change from peak to trough and from the trough to the most recent data point—March 2013—for each state in the region. The table below shows that the region as a whole has added more than 27,000 construction jobs since the low point, but this number pales in comparison to the number of construction jobs lost during the downturn—more than a half-million.
This observation is not to suggest that we should be looking for a return to the 1.35 million total people who were employed in the construction sector during the peak of the housing boom, but it does help add perspective. Also, looking at the state-by-state data, we see that each state has performed a bit differently. That said, the question still stands: Given the increase in construction activity, shouldn’t we be seeing stronger gains in construction employment? The answer appears rather straightforward, as the chart below shows.
While our contacts in the homebuilding sector are reporting an increase in activity—both sales and construction—the increase in permits for new home construction has been modest and is coming off very low levels. The trend is clearly in the right direction and appears to have momentum, but even stronger gains are needed if we are to see more significant increases in construction employment.
My colleagues Jessica Dill and Whitney Mancuso blogged on this subject back in December:
Perhaps the situation with construction employment simply boils down to a comment recently made by a real estate developer contact: "Capacity is lacking in all trades throughout the homebuilding process, which has limited how quickly production can be increased. Such capacity issues are always largest on the front end of the recovery. It is likely that labor will fill in at a quicker pace as the recovery picks up more steam."
By Mike Chriszt, a vice president in the Atlanta Fed’s Public Affairs department
Expansion in Regional Manufacturing Continues
Manufacturing contacts in the Southeast region reported continued expansion for the fourth consecutive month, as reflected in the Southeast Purchasing Managers Index (PMI).
The Southeast PMI, produced by the Econometric Center at Kennesaw State University, provides an analysis of the most current market conditions for the manufacturing sector in Alabama, Georgia, Florida, Louisiana, Mississippi, and Tennessee. The index is based on a survey of representatives from companies in those states regarding trends and activity of new orders, production, employment, supplier delivery time, and finished goods. A reading on this index above 50 represents an expansion in the manufacturing sector, and a reading below 50 indicates a contraction.
This positive trend for manufacturing activity came as a pleasant surprise as the Institute of Supply Management (ISM) Manufacturing Index reported two consecutive drops in the national PMI, suggesting manufacturing growth to have slowed nationally. While Southeast PMI is not a subset of the national index, both measure a mix of similar components by surveying purchasing managers.
The Southeast PMI experienced less than a point increase in April compared with March. Although this increase over the prior period is minimal, the overall index reflected the highest level since May 2012 at 55.5, which is 5.5 points above the of 50-point benchmark. Increases in indices of new orders, production, and employment drove this growth, and each of these components was substantially above its respective measure in the national PMI.
Production experienced the most significant jump of the survey components, with an increase of 5.7 points from March to April, ending at 61.2. Employment jumped 4.1 points during the same period to 57.8. While new orders reflected a much smaller increase of 0.4 points, this minimal increase brings the submeasure to 57.8, well above the expansion benchmark (see the chart).
Of survey participants, 43 percent expect production to be higher in the next three to six months, versus 33 percent for the prior survey period. Although this is not the highest level of optimism reported this year by survey participants, those following the industry welcome these positive sentiments while watching to see if the region will continue to outperform national manufacturing activity.
By Amy Pitts, a senior Regional Economic Information Network analyst in the Atlanta Fed’s Nashville Branch