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Atlanta, Georgia September • 1959 Construction Trends: Letup After a Pickup? C Also in this issue: LOANS FOR PROPERTY IMPROVEMENT DISTRICT BANK LENDING IN THE MONTHS AHEAD SIXTH DISTRICT BUSINESS HIGHLIGHTS SIXTH DISTRICT STATISTICS SIXTH DISTRICT INDEXES ^Jederaf a c t i v i t y in the Sixth Federal Reserve District may be taking at least a temporary breather following an upturn that con tributed substantially to general economic recovery in this region. If this is the case, it is in contrast to what many observers expected— that a downturn would have started by this time. Instead of acting as a drag on general business conditions, therefore, the construction in dustry in this District has continued to support a high level of business activity in recent months. Whether or not it will continue to play such a salutary role is, of course, open to question. Straws in the wind suggest that offsetting trends among the various types of construction activity may be developing to give at least a period of little change for the District as a whole. As yet, there is no clear evidence of the down turn many have been expecting. V _^o n s t r u c t io n Stability After Rise The accompanying chart on construction employment in Sixth District states—Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennes see—gives the best available indication of recent trends of construction activity in this region. Because the wide seasonal swings tend to ob scure more basic changes, the actual employment figures, shown by the dashed line, have been adjusted to eliminate the aver age seasonal changes. As the resulting seasonally adjusted line shows, construction activity reached a record high in May of this year. After a slight decline in June, activity recovered somewhat in July, giving a picture of high-level stability for the last five months. A gradual rise had been under way since the first quarter of 1958. As a result of this expansion in activity, construction employment in the five months ending with July 1959 averaged about 9 per cent higher than during the first quarter of 1958. The recent high in construction activity, following an advance during 1958 and early 1959, it should be em phasized, is a general picture of developments in the six states. As an old saying goes, however, “All generaliza tions are false, including this one,” the essential truth of which is suggested by considerable variation from state to state. The general picture perhaps comes closest to describ ing developments in Florida, Georgia, and Mississippi, where construction activity, as measured by employment, has been at a record or near-record after a period of sharp advance. Florida’s upward trend, however, continued through the first seven months of this year, while activity in Georgia has been fairly stable at an advanced level for about a year, and in Mississippi there has been a slacken ing after an unprecedented rise in the first half of last year. The scene in Tennessee has been similar to the composite picture in that the growth continued through 1958 and has stablized since then; the principal difference is that employ ment in Tennessee is still well below the record set in 1954. Alabama and Louisiana show the greatest variation from the composite picture. In those states, construction employment has shown no firm evidence of advancing in the last year and a half or two years, remaining well below earlier peaks. Increase Nicely Timed The fortunate timing of the growth in District construction activity is apparent when one considers that general eco nomic activity in this region had been declining during the last half of 1957 and early 1958. Starting upward in early 1958, construction undoubtedly was a major factor in reversing the downward direction of business and in contributing to the economic recovery since about April last year. Even during the recession, construction employ ment held up well, providing support when it was needed. Much of the credit for the construction industry's bene ficial role over the last two years must go to homebuild ing, the most important component of the construction industry. In this District, homebuilding began to pick up over two years ago, in the second quarter of 1957, and rose almost continually until it reached a record in the third quarter of 1958. Since that time, homebuilding has held at an advanced level. During the 1957-58 recession, most observers expected a rise in homebuilding to follow easing of general credit demands and the increased availability of money. The sharpness of the rise, however, was probably greater than was expected. This, together with the expectation that increasing credit demands associated with economic re covery would draw investment funds away from mort gages, led to the belief that homebuilding could not be long sustained at the levels reached in late 1958. How ever, advance commitments, made in large volume when credit was relatively easy to finance homes built in more recent months, helped sustain homebuilding. Also help ing were increases in yields on home mortgages and a continued large flow of savings into institutions specializ ing in home financing. These developments explain in large part why construction has not turned down. True, homebuilding has been a major support in Dis trict construction, but it may yet be a source of uncer tainty in the near-term outlook. The reasons leading to the expectation of a decline in homebuilding were, after all, valid ones. The realization simply may have been delayed. This possibility is suggested by housing starts for the nation which declined in May, and after a month of no change, again in July. In the meantime, mortgage funds have become somewhat less readily available than earlier in the year, and since national financial markets are an important source of funds for home financing in this District, this might have a depressing effect. Never theless, building permit data indicate the recent national decline in homebuilding has not yet been mirrored in this District. Offsetting Trends Developing? Although District homebuilding may well be lower in the coming months, developments in other types of construc tion also have to be reckoned with in assessing the over all industry. Detailed data on contract awards indicate that the increase during 1958 and early 1959 was due not only to greater homebuilding, but also to a sharp rise in commercial construction and in projects for build ing public works and utilities. Contracts for commercial construction have shown signs of leveling off recently, but unusually large projects for constructing public works and utilities promise to sustain District activity for some time. Another important development is that awards for industrial building, which were a serious drag on overall activity last year, have been up substantially this year. In general, these happenings are in accord with the findings of national surveys made earlier this year that businessmen plan to spend more for new plant and equipment this year than they did last year. If homebuilding eases off in the coming months, its role of sus taining economic activity may be taken over to an in creasing extent by other types of construction activity. That we are perhaps in for a period of watchful waiting is suggested by the index of construction contract awards included in the chart on the last page of this Review. A slight decline from the record volume set in March has occurred in recent months. Because the extraordinarily high volume reflected an unusual bunching of large proj ects which normally take a long time to complete, how ever, construction activity is likely to be sustained for a longer period than usual. Nevertheless, before a resump tion of the upward movement in overall District construc tion activity can reasonably be expected, total contract awards will probably have to improve more than they did in Julv. y P h i l i p M. W e b s t e r •2 • Loans for Property Improvement L A R G E R F A M IL IE S A Have you noticed the many building projects going on in the residential neighborhoods around town? If yours is a typical city in the Southeast, the project you see most frequently is the addition of a room, a carport enclosure, or a similar type of alteration. Bankers in this area tell us that these are the principal improvements for which homeowners seek help in financing. The need for larger living quarters is one facet of the recent population increase about which little has been said. Some homeowners have solved the problem of pro viding more space for their larger families by moving to larger houses. Others, however, have accomplished the same thing by building on to their present houses. We have long been aware that the population growth during recent years has boosted the demand for all types of goods and services, and we now realize that it has had a strong impact on the home improvement business. More over, there has been a corresponding increase in demand for credit to finance the home improvements. These conclusions are confirmed by a survey of 295 commercial banks in the Sixth District, which includes Alabama, Florida, and Georgia, the eastern two-thirds of Tennessee and the lower halves of Louisiana and Missis sippi. Each of these banks was asked several questions about its home improvement loans. The banks that re sponded, over 90 percent of those asked, account for 93 percent of total improvement loans outstanding at all commercial banks in the District. Since most types of home improvement— or repair and modernization—proj ects are done with borrowed money, the replies from the bankers give us a good indication of the financing prac tices for home improvements. According to the bankers, fix-up jobs— repainting, re roofing, addition of siding, and the like—were close be hind room additions and alterations as a use of property improvement loans on both new and old houses. The addition of fences and awnings was third in importance, followed by installation of heating and air conditioning. An “all other” purpose was listed last. Homeowners have not always found it so easy to ar K E Y FA C T O R range for credit to fix up their homes. It has only been since the mid-thirties that the use of the amortized, or monthly instalment, loan for property improvement or for the purchase of a home has become widespread. Twenty Years' Growth Although an appreciable volume of such loans was made before World War II, most of the growth in prop erty improvement loans in the nation, as in other forms of consumer credit, has occurred since the war. Total home improvement loans, or repair and modernization loans as they are sometimes called, amounted to $298 million at the end of 1939. The total declined during the war years to $182 million at the end of 1945. Since that time repair and modernization loans have grown rapidly, totaling by mid-1959 $2.2 billion. Thus, the expansion of home improvement loans has kept pace with the rapid growth in other types of consumer credit during this period. The nation’s commercial banks provide the bulk of credit to homeowners for property improvement. In mid1959, commercial banks had $1.7 billion on their books out of a total of $2.2 billion outstanding at all lenders. The rapid growth of property improvement loans dur ing the last 20 years reflects a basic change in bankers’ attitudes toward loans on real estate as well as the growing demand for these loans. Previously, bankers were reluctant to lend heavily on real estate in view of risks inherent in widely fluctuating real estate prices. The pro vision for the insurance of property improvement loans by the Federal Housing Administration beginning in 1934, however, eliminated much of the risk of such loans to the lending institutions. After banks and other lenders began making home improvement loans, moreover, they found that the loss rates on property improvement loans were lower than for many other types of consumer loans. This favorable loss experience on both FHA insured loans and on loans made wholly by banks undoubtedly has boosted home improvement loans. Sixth District banks have more than kept pace with lenders in other parts of the nation in making repair and modernization loans, particularly in recent years. Their repair and modernization loans rose from $52 million at the end of 1951 to $135 million in July 1959, a gain of 160 percent. This compared with a gain of 80 percent at all commercial banks in the nation and a rise of about 100 percent by lenders of all types. As would be expected most of the dollar amount of repair and modernization loans was for repair or remod eling of old houses, defined as those over two years old. Bankers estimated that, on the average, about 80 percent of their loans outstanding were made for improvements to old houses. It appears surprising, however, that 20 per cent represented work on houses under two years old, on which, ordinarily, little repair or upkeep is necessary. How do homeowners go about arranging for repair and modernization loans at commercial banks? The bankers • 3 • reported that over half of the loans are made over the counter, that is, arranged personally by the borrower. The remaining homeowners fill out a loan application through their building material dealer or through their contractor. The dealer or contractor then forwards the application to the bank and usually has no further part in the loan agreement. This latter type of arrangement is generally referred to as dealer paper or indirect loans. Bank Lending Practices Home Improvement Loans 278 Sixth District Member Banks Type of loan; percent of banks using FHA plan only ..................................................... 46 Own plan o n ly ..................................................... 26 Both plans.............................................................28 loo The Bank's Plan and the FHA Plan A homeowner may apply for a loan that is insured by the Federal Housing Administration or he may elect to use his banker’s own home improvement plan. In either case he applies for the loan either in person or through a con tractor or dealer. If he elects the FHA plan and his credit is good, the FHA will insure the bank making the loan against loss. Such loans are insured under the FHA Property Improvement Plan (so-called Title I loans). Improvement loans on single-family homes made under this plan cannot exceed $3,500 and must be repaid in monthly instalments over a period not to exceed five years. The financing charge may not be greater than a discount of $5 per $100 per year on loans of $2,500 or less. These loans are available for most types of home improvement but certain projects such as swimming pools and tennis courts are not covered. A home improvement loan under a bank’s own plan is arranged in the same way—either directly or through a dealer. In the case of loans made under a bank’s own plan, there is, of course, no limitation on the interest and other charges as is the case of FHA insured loans. More over, the loans may be made for any purpose that the bank considers sound. Of the 278 banks reporting in the survey, 128, or 46 percent, make loans under the FHA plan only; 73 banks, or 26 percent, use their own plan only. The remaining 77 banks make loans under both the FHA and their own plan. There is apparently a growing tendency for banks to emphasize their own home improvement plan rather than the FHA plan. Some banks apparently feel that their own plan involves less administrative cost and can accommo date worthwhile purposes that would not meet FHA re quirements. Other bankers feel that small loans are not profitable under the FHA because servicing and adminis trative costs may come near, or even exceed, the maxi mum charges allowed by the FHA. Almost all of the banks indicated that they were charging customers the maximum rate (5 percent on the first $2,500) on loans made under FHA terms. Our survey revealed that banks do charge homeowners a little more under their own plan than under the FHA plan. The majority of banks that supplied information on interest rates reported that they were charging 6 percent on the original amount. This charge usually included a premium on a life insurance policy on the borrower. Bankers have apparently lengthened maturities on both FHA and their own home improvement loans since the end of 1957. Fifty-one percent of the banks reported a tendency toward longer maturities on FHA loans; 46 percent indicated no such tendency. Twenty-nine percent of the banks reported longer maturities on loans made under their own plan; 67 percent indicated no change. How loans are arranged; percent of dollar volume at average bank FHA Own Plan P e rso n a lly ......................................... 58 71 Building material d e a le r ................... 23 15 Contractors ......................................19 14 100 100 Maturity of loan; percent of total outstandings* 24 months or less...............................15 25-36 m o n th s .................................. 67 Over 36 m o n th s .................................. 18 7oo~ Average size of lo an*...........................$494 16 56 28 10(T $981 Reason for borrowing; ranked by relative importance Room addition and alteration...............................1 Roofing and s id in g .............................................. 2 Fences and aw nings.............................................. 3 Heating and air conditioning...............................4 O t h e r .....................................................................5 * Based on dollar figures supplied by 75 banks in survey. A part of the longer maturities has centered in loans with maturity of over 36 months. Eighty-four of the 204 banks answering this question stated that the proportion of FHA loans with maturities of over 36 months was higher than at the end of 1957; 28 banks indicated that this was true also for their own loans. Home improvement loans usually are not secured. In addition to approving the homeowner’s credit, therefore, banks and other lenders take care to see that the con tractors performing the work are reputable. In the course of insuring property improvement loans, the FHA has developed a list of builders and contractors that are in eligible to work under the FHA insurance program. Banks and other lenders also refuse to make loans under their own plans when the work is to be performed by certain contractors. To further assure that acceptable construc tion methods are being used, lenders usually inspect the improvement, either while it is being made or after it has been completed. Not only are these precautions beneficial to the lender, they also protect the homeowner. The average homeowner can, at one time or another, benefit from a home improvement loan. Because repairs and alterations are expensive, the homeowner usually finds it necessary to obtain credit to carry on the work. The nation’s bankers and other lenders have proved equal to the task of supplying the growing demand for credit for this purpose. From all indications, they will meet the even greater demands of the future. w *>, m v n *4 • District Bank Lending in the Months Ahead Bank lending generally moves forward at an accelerated pace during the latter part of the year because of a sea sonal rise in the demand for credit. A review of loan trends over the past decade reveals that in each year the percentage increase in total loans outstanding at District member banks has been greater in the second half of the year than in the first six months. If this pattern were to continue, outstanding loans would rise at least 7.0 percent during July-December of this year. Whether loan expan sion falls short of this mark or rises above it depends upon the oft-quoted factors: demand and supply. The underlying forces affecting the economy point up ward, and barring a prolonged steel strike, demand for loans should continue active. Loan demand has been strong in the District throughout the general upswing in economic activity which has been under way since April 1958. Since that date, all major categories of loans have expanded sharply, and banks in all District states, particu larly Georgia and Florida, have registered gains. The expansion in loans that has already occurred, coupled with Federal Reserve System actions designed to limit the supply of loanable funds, has, however, placed in creased pressure on bank reserve positions. These pres sures are reflected in certain measures of bank liquidity— the ratio of loans to deposits and the proportion of short term Governments to total deposits— and the level of member bank borrowing. With loans expanding at a much more rapid rate than deposits, the loan-deposit ratio is now substantially higher than it was at its 1957 peak. Also the ratio of bank holdings of U. S. Government securities with maturities of less than one year to deposits is lower now than during the period of credit stringency in 1957. Member bank borrowing from the Federal Reserve Bank of Atlanta, moreover, has risen sharply. Daily average borrowings in August totaled $114 million, $37 million higher than the average for the peak month in 1957. Pressures on bank reserves and related items, therefore, may affect the ability and to some extent the willingness of District member banks to continue to extend credit even at prevailing high rates. The ability of banks to lend in coming months will depend largely on their ability to obtain funds through sales of Governments. With security prices relatively low, particularly securities with maturities of 3 to 5 years, the banks’ willingness to finance loan ex pansion in this way may be put to a real test, since such sales would involve some capital loss. It would also mean that District bankers are, on the average, moving toward the higher loan-asset ratios prevalent in the “twenties” and early “thirties.” At present the ratio of loans to total assets for District banks is lower than that for all banks in the United States. This reflects in part the slower rate of security liquidation by District banks in the first half of At Sixth District Member Banks total bank credit . . . loans and investments . . . rose only slightly during the first seven months of this year after increasing sharply during 1958. •HUon I 3 ...I . . . 1956 , . . . . I ............ 1957 i ............ ................. 1958 .......................... ~r~i6.5 1959 The slackened growth in bank credit reflects liquidation of bank investments . . . primarily U. S. Governments . . . which about offsets a sharp expansion in loans. I,II,on t B.ll.or I The expansion in loans has tended to outpace the growth in bank deposits, and the loandeposit ratio is at a record high. PtfCnt 47 - Percent 47 Ratio of Loonsto Deposits I 43 - 43 41 - - 41 39 39 1956 1957 1958 1959 Loans have expanded, at varying rates, in all District states. N .ll** | M,M«n •5 • t 1959. With substantial holdings of intermediate and long term U. S. Government securities still available, District banks may increase the rate at which they dispose of securities in the latter part of this year. If securities are sold, the sacrificing of high yields may have an important influence on the cost of credit in the loan market. A l f r e d P. J o h n s o n To Our Readers (In Thousands of Dollars) Deportment Store Soles and Inventories* Percent Change Place ALABAMA . Birmingham Mobile . . Montgomery FLORIDA . . Daytona Beach Jacksonville Miami Area Miami Orlando St. Ptrsbg-Tam Area GEORGIA . . Atlanta** . Augusta Columbus . Macon . . Rome** Savannah . LOUISIANA . Baton Rouge New Orleans MISSISSIPPI Jackson . . Meridian** TENNESSEE . Bristoi-Kinosoort Johnson City** Bristol (Tenn.&Va Chattanooga Knoxville DISTRICT —0 +6 —3 —7 —7 —4 —5 +0 +5 +6 +0 +12 +8 +11 +5 +14 +19 +6 +12 +17 +6 —16 —7 +2 +18 +4 +3 +2 +1 —12 —14 —3 +7 —3 +6 +6 +12 +10 +19 —5 —9 —4 +0 +4 +9 +11 +9 +8 +4 —5 —8 —6 +6 —2 +6 —4 +10 +11 +11 +9 +10 +6 +13 +6 Inventories July 31,1959 from June 30 July 31 1959 1958 —2 —2 —0 +2 —0 —1 +11 +15 +12 +7 +10 +25 +18 +21 —1 +5 +21 —0 +0 +11 +5 +4 —1 +1 +1 +0 +5 —0 +8 +9 +5 +7 +9 +2 +13 +6 +11 +5 +8 +7 +4 +10 +6 —3 —9 +18 +8 +10 +8 +3 +6 +0 —0 +15 +11 +8 +5 —5 + 2i +10 •Reporting stores account for over 90 percent of total District department store sales. **In order to permit publication of figures for this city, a special sample has been constructed that is not confined exclusively to department stores. Figures for nondepartment stores, however, are not used in computing the District percent i-fa-yc On August 1, the Union State Bank, Pell City, Ala bama, a nonmember bank, began to remit at par for checks drawn on it when received from the Federal Reserve Bank. Officers are Pat Roberson, President; J. Fall Roberson, Sr., Vice President; Harold D. King, Cashier; and A dell H. Parker and Lois Compton, Assistant Cashiers. Capital stock totals $100,000 and surplus and undivided profits $227,275. Debits to Individual Demand Deposit Accounts With this issue, most of the readers of the M o n th ly R eview are being sent a post card which is to be returned to us in order that we may bring our mailing list up to date. Please check the spelling of the name, the address, adding the zone number where applicable, and return the card to us as soon as possible. If this card is not returned, we shall as sume that you are no longer interested in receiving the R eview , and your name will be removed from the mailing list. Sales July 1959 from 7 Months June July 1959 from 1959 1958 1958 Bank Announcement July 1959 June 1959 Percent Change Year-to-date 7 Months July 1959 from 1959 July June July from 1958 1959 1958 1958 ALABAMA 35,131 40,0% 45,728 Anniston . 722,167 906,012 875,180 Birmingham 27,376 31,423 Dothan . 32,280 31,482 38,399 Gadsden . 40,183 55.518 62,536 Huntsville* 61,418 241,402 283,841 300,850 Mobile 146,974 168,506 172,451 Montgomery 22,565 20,499 23,636 Selma* 49,957 50,928 54,592 Tuscaloosa* 1,331,477 1,620,344 1,589,309 Total Report ng Cities 636,517 718,265 Other Citiesf . . 752,798 FLORIDA 61451 Daytona Beach* 60,698 67,198 172)377 Fort Lauderdale* 211,851 202,881 Gainesville* 39,682 41,839 36,275 800,767 812,782 761,909 Jacksonville 14.232 Key West* . 16,211 16,375 64,389 Lakeland* . 76,154 76,663 Miami . . 906,210 753,891 870,680 1,148,090 Greater Miami 1,352,908 1,291,733 202,039 Orlando . . 256,297 252,924 Pensacola 98,451 79,413 89,986 245,894 186,594 223,179 St. Petersburg Tampa . . 428,901 428,365 343,191 West Palm Beach* 134/967 117,980 125,555 Total Reporting Cities 3,729,281 3,187,940 3,622,980 1,624,007 1,536,046 1,361,158 Other Citiesf GEORGIA Albany 57,477 61,000 65,094 Athens* . 36.411 40,730 38,543 Atlanta 2 052,331 1,980,702 1,730)024 Augusta . 111,357 109,678 91,613 Brunswick 27,006 26,509 21,835 Columbus 109,155 106,920 100,041 Elberton . 9,073 9,172 9,6% Gainesville* 49,898 48,580 50,3f6 Griffin* . 18,855 18,324 15,927 LaGrangef* 20,818 19,356 17,%7 Macon 124,417 118,956 107,610 Marietta* 31,746 30,679 25,104 Newnan 18,732 15,810 17,645 Rome* 45,640 43,853 37,119 Savannah 206,954 213,501 177,071 Valdosta . 41,464 33,619 26,316 Total Report;ng C 2,967,497 2,880,975 2,522,212 Other Citiesf 928,773 891,638 765,917 LOUISIANA Alexandria* 74,671 73,892 69,193 Baton Rouge 274,908 265,354 251,076 Lafayette* 67,883 65,004 54,970 Lake Charles 88,379 84,854 81,065 New Orleans 1,380,466 1,328,0% 1,239,689 Total Report ng Cities 1,886,307 1,817,200 1,695,993 Other Citiesf . 553,763 571,843 512,189 MISSISSIPPI Biloxi-Gulfport' 51,563 49,502 47,283 Hattiesburg . 38,537 35,634 32 598 Jackson . . 295.947 306,253 273,862 Laurel* . . 28,796 27,134 24,034 Meridian . . 46,286 47,428 38,794 Natchez* 22,831 21,572 19,411 Vicksburg 19,946 19,080 17.843 Total Reporting Cities r03,906 506,603 4S3,825 Other Citiesf 261,577 253,454 223,454 TENNESSEE Bristol* . . 46,159 49,495 39,9% Chattanooga 362,906 339,%3 281,147 Johnson City* 43,553 44,769 39,026 Kingsport* . 89,649 81,825 68,448 Knoxville 246,300 233,237 212,534 Nashville 717,699 713 825 641.221 Total Reporting Cities 1,506,266 1,463,114 1,282,372 Other Citiesf 564.478 550,567 442 446 SIXTH DISTRICT 16 867,%2 16,433,029 14,415,500 Reporting Cities 12,182,566 11,911,216 10,473,819 Other Citiesf 4,685,3% 4,521,813 3,941,681 Total, 32 Cities 10,417,367 10,218,566 8,940,726 UNITED STATES 344 Cities . 235,625,000 228,615,000 206.521.000 * Not included in total f Estimated. +14 —3 +3 +5 —2 —6 +2 +5 +9 —2 +5 +U +4 —5 — 1 — 1 — 1 +4 +5 + 1 +9 +10 +0 +7 +3 +6 —6 +6 +4 —2 +2 +2 — 1 +3 +3 +8 +5 +3 +18 +4 —3 +23 +3 +4 +1 +4 +4 +4 +4 +4 —3 +* +8 —3 +6 —2 +6 +5 —1 +3 —7 +7 —3 +10 +6 +1 +3 +3 +3 +2 +4 +2 +3 +30 +21 +18 +28 +17 +15 +12 +20 +U +18 +17 + !5 +7 +19 +18 +?2 +12 +21 +11 +13 +15 +19 +9 +23 +9 +11 +9 +J2 +5 +12 + ’4 + 1S +20 +18 +27 +24 +32 +25 +14 +17 +19 +11 +18 +16 +15 +28 +12 +21 +19 +16 +16 +16 +6 +12 +19 +20 +24 +9 -6 +15 +13 +25 +9 +4 +18 +16 +16 +26 +14 +15 +16 +22 +23 +17 +58 +18 + 21 +15 +15 +32 +14 +18 +12 —1 +6 +8 +1 +8 +8 +8 +9 +23 +9 +10 +18 +6 +11 +11 +Z +8 +8 +15 +9 +18 +8 + 2° + !9 +18 + !2 +18 +15 +?2 +18 +W +13 +1 + 1 71 +?? +17 + ’5 +29 +32 + 31 +16 +20 +8 + }* +12 +16 +19 +17 +14 +17 +15 +14 +? +12 +’? + 17 +17 +28 +17 +}5 Sixth District Indexes Seasonally Adjusted (1947-49 = 100) 1958 SIXTH DISTRICT JU n I Nonfarm Em ploym ent..................... 134 Manufacturing Em ploym ent.............. 116 Apparel................................... 168 Chem icals................................ 132 Fabricated M e t a ls ..................... 175 F o o d ...................................... 109 Lbr.( Wood Prod., Fur. & Fix. . . . 74 Paper & Allied P ro d u c ts .............. 154 Primary M e t a ls ......................... 91 Textiles................................... 84 Transportation Equipment.............. 210 Manufacturing Payrolls .................. 195 Cotton Consumption**..................... 80 Electric Power Production** . . . . 312 Petrol. Prod, in Coastal Louisiana & M ississip p i**.............. 167 Construction. C o n tra cts*.................. 394 Residential................................ 381 A H O th e r................................ 405 Farm Cash Receipts......................... 165 Crops ................................... 146 Live sto ck ................................ 184 Dept. Store S a le s * /* * ..................... 177 A tla n ta ................................... 169 Baton R o u g e ............................ 199 B irm in gh am ............................ 130 C hattanooga............................ 144 Jayson ................................ 106 J ack so n ville ............................ 126 K n o x v ille ................................ 137 ................................... 165 M ia m i................................... 260 New O r le a n s ............................ 146 Tampa-St. Petersburg.................. 202 Dept. Store Sto cks*......................... 191 Furniture Store S a l e s * / * * .............. 138 Member Bank D e p o s its * .................. 174 Member Bank L o a n s * ..................... 279 Bank D e b its*................................ 233 Turnover of Demand Deposits* . . . . 144 In Leading Cities ..................... 168 Outside Leading C it ie s .................. 104 ALABAMA Nonfarm Em ploym ent.................. 118 Manufacturing Employment . . . . 104 Manufacturing Payro lls.................. 175 Furniture Store S a l e s .................. 129 Member Bank D ep o sits.................. 150 Member Bank L o a n s..................... 231 Farm Cash Receipts..................... 147 Bank D e b it s ............................ 206 FLORIDA Nonfann Em ploym ent.................. 182 Manufacturing Employment . . . . 178 Manufacturing Payrolls.................. 298 Furniture Store S a l e s .................. 155 Member Bank D eposits.................. 227 Member Bank L o a n s..................... 447 Farm Cash Receipts..................... 308 Bank D e b it s ............................ 354 GEORGIA Nonfarm Em ploym ent.................. 128 Manufacturing Employment . . . . 113 Manufacturing Payrolls.................. 186 Furniture Store S a l e s .................. 134 Member Bank D ep o sits.................. 152 Member Bank L o a n s..................... 216 Farm Cash Receipts..................... 167 Bank D e b it s ............................ 212 LOUISIANA Nonfarm Em ploym ent.................. 129 Manufacturing Employment . . . . 95 Manufacturing Payrolls.................. 167 Furniture Store S a le s * .................. 175 Member Bank D e p o s it s * .............. 159 Member Bank L o a n s * .................. 272 Farm Cash Receipts..................... 147 Bank D e b its * ............................ 211 M ISSISSIPP I Nonfann Em ploym ent.................. 127 Manufacturing Employment . . . . 125 Manufacturing Payrolls.................. 231 Furniture Store S a le s * .................. 113 Member Bank D e p o s it s * .............. 186 Member Bank L o a n s * .................. 337 Farm Cash Receipts..................... 145 Bank D e b its * ............................ 191 TENNESSEE Nonfann Em ploym ent.................. 119 Manufacturing Employment . . . . 113 Manufacturing Payrolls.................. 182 Furniture Store S a le s * .................. 103 Member Bank D e p o s it s * .............. 161 Member Bank L o a n s * .................. 248 Farm Cash Receipts...................... 113 Bank D e b its * ............................ 199 JULY AUg ! 134 117 170 130 178 111 135 117 168 130 181 110 SEPT. I OCT\ NOv! DEC. I 136 118 169 127 179 113 137 119 170 128 178 112 80 159 90 86 213 204 136 118 172 129 179 112 79 160 92 86 217 205 208 199 81 312 221 200 83 313 136 117 167 127 182 112 79 159 89 86 220 200 89 311 170 427 377 468 134 90 184 175r 168 185 128r 159 111 127 139 164 269r 141 207 193r 140r 170 278 240 148 165 110 176 397 413 384 136 118 182 183 183 187 147 161 124 138 156 183 285 147 219 192 153 176 281 230 147 165 113 187 393 421 371 104 82 185 167 158 179 133 150 107 129 151 147 250 140 209 198 145 175 282 257 146 161 116 190 364 433 308 112 84 217 165 154 180 131 154 111 135 146 153 258 144 209 202 145 175 285 250 142 149 105 118 104 175 128r 150 235 143 210 118 104 177 145 154 233 130 208 118 104 175 138 152 234 97 231 186 183 309 155r 225 449 214 360 186 185 313 172 233 456 206 342 128 114 193 129r 146 213 129 219 75 154 76 156 89 85 88 85 80 159 94 86 203 199 87 314 87 84 316 330 190 333 375 298 123 201 309 367 262 130 1959 JAN^ 137 119 173 132 182 113 F ii! 7980 160 137 120 174 132 178 114 161 9192 8687 M AR? 138 121 174 133 179 115 78 161 95 88 200 209 213 204 9192 351 205 206 93 346 193 445 382 496 134 113 164 168 180 127 154 116 141 154 155 248 139 203 198 154 178 303 270 153 162 121 189 463 394 520 142 105 185 167 155 171 127 148 104 136 147 143 251 130 221 195 141 179 305 271 149 160 118 341 MAY 139 JUNE JULY 176 135 180 115 79 161 98 87 207 214 94 340 179 135 181 113 80 163 139 123 182 135 182 114r 79 163r 103 215 92 346 207 219r 89 357 213 224 198r 453 398 499 150 127 183 175 169 190 135 148 206r 397 429 370 151 131 181 182 161 187 135 164 206 411 433 393 151 130 151 170 263 142 230 135 153 166 269 144 251 192 186 174 192 127 161 114 139 148 168 277 151 245 207 n.a. n.a. n.a. n.a. n.a. n.a. 189p 178p 178p 136 168 124p 138 164 167 301p 155p 241p 157 178 311 272 145 164 153 182 316 259 158 174 126 148 183 321 276 152 174 117 158p 181 329 281 162 179 124 121 121 122 100 88 210 88 140 123 186 135 181 112 80 165 102 88 110 n.a. 216 170 161 214 129 163 126 136 155 158 230 144 214 207 152 180 291 243 139 146 102 211 176 162 204 138 156 124 142 163 158 256 148 212 205 148 179 292 273 150 161 121 192 336 364 314 141 128 162 174 164 195 136 162 124 143 161 161 242 145 207 200 161 181 298 265 144 153 114 120 104 182 136 153 239 106 221 120 104 186 136 158 246 101 216 120 105 179 131 155 242 111 232 121 105 182 147 155 248 126 233 120 106 185 154 154 254 123 232 121 107 189 125 154 250 147 231 107 193 145 156 254 148 235 107 190 135 157 259 132 227 106 195r 134r 160 266 162 249 109 198 129p 160 275 n.a. 250 188 187 320 171 233 457 212 384 188 187 326 153 235 463 162 388 188 186 322 170 241 477 147 357 187 186 316 167 241 477 162 403 188 188 318 176 242 485 281 370 189 190 326 184 238 492 232 378 191 193 319 163 235 500 182 383 193 195 343 183 233 511 230 379 195 195 351 176 241 526 227 387 197 198 351 175 243 534 236 420 199 129 114 195 154 154 212 157 212 130 116 191 147 155 219 158 236 130 115 190 151 154 223 104 224 130 130 116 200 153 158 227 153 243 131 115 195 149 159 230 143 236 131 131 117 204 134 157 235 169 242 132 118 206 151 157 244 150 247 132 119 148 160 246 158 235 132 119r 215 139 159 250 140 252 127 94 164 183r 153 264 143 209 127 95 168 189 157 273 109 201 128 % 167 181 155 265 72 235 128 % 165 166 152 268 99 215 129 128 96 178 177 160 293 123 230 128 96 179 191 165 295 159 218 128 96 175r 177 165 295 146 241 127 96 177 209p 160 302 n.a. 231 127 127 235 101 184 367 138 207 127 129 246 123 192 352 100 201 130 130 247 101 194 359 59 221 131 133 247r 132 195 398 163 240 131 133 254 115 197 403 n.a. 234 119 113 187 %r 156 243 114 201 119 114 193 105 159 250 112 202 120 115 192 103 158 247 77 217 99 92 116 201 141 158 226 124 218 128 161 116 197 143 157 237 142 238 201 112 120 121 200 211 169 196 159 274 109 230 129 % 173 171 163 284 103 210 216 128 % 175 203 165 293 130 227 130 132 247 80 197 359 99 211 131 133 248 107 198 363 129 214 130 132 245 133 195 369 122 233 132 131 247 114 197 361 93 217 131 131 246 106 190 367 85 210 131 131 251 97 198 378 146 226 130 132 250 114 195 383 129 226 132 134 247 120 116 187 103 159 251 114 220 120 120 116 1% 113 162 256 100 235 120 117 202 111 165 262 98 230 121 118 204 114 160 267 107 243 122 119 205 109 159 268 119 232 123 119 208 114 162 272 109 231 122 97 116 187 112 161 251 114 213 129 95 173 174 160 287 111 172 197 156 277 114 199 98 112 •For Sixth District area only. Other totals for entire six states. n.a. Not Available.p Preliminary. r Revised. Daily average basis. Sowees: Nonfann and mfg. emp. and payrolls, state depts.of labor; cotton consumption, U. S. Bureau Census; construction contracts, F. W. « Mines; elec. power prod., Fed. Power Comm. Other indexes based on datacollected by this Bank. All indexes calculated by this Bank. APR. 138 121 120 191 391 139 209 119 206r 116 166 276 % 228 112 202 212 122 201 363 178 238 544 n.a. 424 134 120 219 157p 157 256 n.a. 260 123 123 206r 116 164 283 113 238 213 lOOp 165 287 n.a. 242 120 121 Dodge Corp.; petrol, prod., U. S. Bureau 7* '1 9 S I X T H D I S T R I C T B U S I N E S S H I G H L I G H T S 1947-49-100 S««»0"0Hy A< N onfarm Employment increased in July. T h is w as reflected in rising loans and borrowings by m em ber banks. A lso , nonfarm em ploym ent rose further, and m anufacturing payrolls set a new record. C onsum ers and m erchants continued to borrow and spend at high levels. Farm m arketings declined seasonally, bu t a record harvest is in prospect for this fall. E c o n o m ic a c tiv ity Mfg. Payroll* M fg Employment Electric Power Production C o n stru c ts Contracts Cotton Consumpti Bank Debits. Dept Store % Sto cks Dept. Store Sa le s RATIO TO REQUIRED RESERVES Nonfarm employment, seasonally adjusted, edged upward in July, extending the gradual rise that started about 15 months earlier. Most states showed continued gains or little change in employment following a period of improvement. Louisiana, however, showed a further decline. Manufac turing payrolls also increased. Reflecting improved employment, the rate of insured unemployment dropped after allowance for seasonal changes. Construction activity, as measured by employment, expanded slightly in July, recovering most of the preceding month’s decline. The three-month average of construction contract awards, including July data, rose some what, but was still well below the record set in March of this year. Seasonally adjusted cotton consumption rose sharply in July, more than recovering declines in the two preceding months. Steel activity at mills in Birmingham and Gadsden, Alabama, was virtually halted in mid-July by the strike. The normal seasonal decline in farm marketings continued during July, and farm prices dropped further. Employment on farms edged downward signaling a lull between the crop cultivating and harvesting seasons. Season ally adjusted demand deposits at banks in agricultural areas rose in July, reflecting a rise in farm cash receipts for the first half of the year. Crop conditions remain favorable and indicators point to a record crop for 1959. Retail sales were unchanged in June, when they normally decline, but automotive sales were up strongly. Department store sales, seasonally adjusted, reached a new high in July, with increases occurring in nearly every major metropolitan area; preliminary data for August show even fur ther increases. Department store stocks increased slightly and outstand ing orders were unchanged at the high levels reached in previous months. Furniture store sales in July declined less than seasonally, with sharp gains actually occurring in Georgia (especially Macon) and in Louisiana. Appli ance store sales increased, spurred by sharp gains in Georgia cities other than Atlanta; in the appliance sections of department stores, sales of radios, television sets, and phonographs registered far sharper gains than most other appliances. Export trade through District ports declined about as much as it usually does in June, but the dollar volume of imports increased more than cus tomarily, especially in the New Orleans customs district. July bank debits, measuring the dollar volume of spending by check, again established a record, increasing less than seasonally only in Louisiana and Mississippi. Consumer instalment credit outstanding in July rose at all institutions except department stores. Much of the increase at commercial banks was accounted for by personal loans; automobile paper outstanding changed little. Trade loans by commercial banks increased during August, with loans to wholesale establishments mounting twice as rapidly as loans to retailers. Consumer saving declined slightly in July, as time deposits and savings and loan shares were virtually unchanged and ordinary life insurance sales went down appreciably. Member bank loans, seasonally adjusted, increased at an ac ce le r a ted pace in July, as gains occurred in all District states. Member bank deposits declined after seasonal adjustment, except in Alabama, Mississippi, and Ten nessee, and banks continued to dispose of a modest amount of investment. In August, total loans at banks in leading cities rose about normally and member bank borrowing from the Federal Reserve Bank of Atlanta set a new high.
@FedFRASER