In March 2001 civilian employment in the 8 Southeastern States was up 538,700 jobs, or 2.2 percent, over March 2000—a more modest rate of growth than in recent years. The economic picture in the region is somewhat mixed, however. A 4.2-percent increase in Florida helped offset a decline in Mississippi and an increase of less than 1 percent in both North Carolina and Kentucky. The unemployment rate for the region was 4.2 percent at the end of March. In Alabama and Mississippi, the unemployment rate was 5.4 percent, the highest in the region.

In Florida, job growth in the Orlando metropolitan area has slowed but still continues to grow at a rapid pace. For the 12 months ending February 2001, growth in nonagricultural employment slowed to 28,800 jobs annually (3.3 percent) compared with more than 39,700 jobs a year earlier. Resort attendance has been reported at as much as 10 percent below last year's rate. Although nonfarm employment increased significantly in the Tampa-St. Petersburg-Clearwater metropolitan area during the 12-month period, there are problems in the high-technology sector. Several telecommunications firms, including call centers, software developers, and computer equipment manufacturers, have announced impending employment reductions. Approximately one-half of the officially announced future layoffs in Florida are expected to occur in the Tampa area.

Compared with March 2000, there were 16,200 fewer manufacturing jobs in Mississippi at the end of March 2001. Most manufacturing sectors reported losses, with furniture, fixtures, and electronic equipment accounting for approximately one-third of the losses. Several manufacturing companies in the State have announced job cuts via layoffs, and seven important manufacturers have announced plant closings for 2001. Construction employment in the State fell 7 percent in the 12 months ending March 2001; however, this sector should receive a significant boost when construction begins in the spring on a $930 million Nissan automotive plant in Madison County. Construction at the plant is expected to involve approximately 3,000 workers.

Major employment announcements from the North Carolina Department of Commerce in recent months include Wal-Mart stores' plans to locate a 1.2-million-square-foot distribution center in Cleveland County, investing $50 million and creating 600 new permanent jobs on a 320-acre site approximately 1 mile west of Shelby. The company plans to break ground for the facility in fall 2001 and be fully operational by fall 2002. Company officials also announced their intent to build a food distribution center in Henderson, which will create up to 400 permanent jobs and result in a $20 million investment in Vance County, one of the State's most economically distressed areas.

In the Atlanta metropolitan area, demand for new homes remains strong. Single-family building permit activity for the 12-month period ending February 2001 was down less than 1 percent from the volume for the comparable period a year earlier. Despite reports of slower traffic at some subdivisions, builders are cautiously optimistic that recent declines in mortgage interest rates will maintain the market's recent high level of performance. Permits were issued for 12,588 new homes during the first 3 months of this year, a 2-percent increase over the first quarter of 2000. Multifamily permit volume during the 12 months ending February 2001 totaled more than 17,800 units, an increase of almost 26 percent from figures of a year earlier. Sharp increases in production have occurred in numerous Atlanta area exurban fringe counties, as well as in some of the city's in-town neighborhoods. It is estimated that 15 to 20 percent of the multifamily activity is for condominiums rather than for rental apartments. Despite a growing pipeline, developer interest in the Atlanta rental market remains strong. However, developers are reporting that lenders have become more cautious due to competitive market conditions and are setting stricter underwriting standards, especially for larger developments.

In the Miami metropolitan area, single-family permit activity for the 12 months ending February 2001 increased 7 percent compared with the same period a year earlier. Multifamily permit activity for the same 12-month period was only 3 percent higher than for the same period a year ago.

In the Birmingham metropolitan area, conditions in the rental market among newer properties have become more competitive in the past 12 months. Overall the apartment vacancy rate was approximately 7 percent at the end of 2000, approximately the same as a year earlier. However, concessions are more widespread and rent increases are very low, particularly in newer properties built after 1990. Occupancy rates in older properties have either increased or remained unchanged.

The Raleigh-Durham-Chapel Hill area continues to be the most active apartment market in the Carolinas. Based on data from Carolinas Real Data, approximately 4,850 units were absorbed during 2000. As of January 2001, an estimated 6,060 units were under construction, and more than 4,400 units were in the planning stages. Given this rate of production, the market is expected to become very competitive during the next 12 months. The overall apartment vacancy rate for the area is expected to increase to between 9 and 12 percent, according to analysts at Carolinas Real Data.

Spotlight on Charlotte-Gastonia-Rock Hill, North Carolina-South Carolina

The Charlotte-Gastonia-Rock Hill metropolitan area has been one of the fastest growing areas in the Southeast region since 1990. According to the 2000 census, the population of the seven-county area increased by an annual average of 2.6 percent (33,775 people) in the decade to approximately 1.5 million. Nearly three-fourths of the growth was attributed to in-migration and has had a substantial impact on the local housing market. Although 55 percent of the growth in the area has been in Mecklenburg County, suburban Union County, just southeast of Charlotte, recorded the highest rate of growth for the decade at 47 percent. Union County and other outlying counties such as Cabarrus, Iredell, and Lincoln are expected to continue to experience substantial gains in population and households given their proximity to the new Interstate 485 "outerbelt" currently under construction around Charlotte.

Nonagricultural wage and salary employment in the Charlotte metropolitan area totaled 849,100 in 2000, an increase of 33,300 jobs (4.1 percent) from 1999. Strong job gains in trade and services have offset continuing job losses in manufacturing and slower rates of growth in the financial-services sector. Manufacturing employment, especially textiles and apparel, has declined from more than 23 percent of all jobs in 1992 to less than 16 percent in 2000. At 3 percent of total employment, the textile industry is less than half as large as it was 8 years ago. The decline in manufacturing employment has especially affected Gaston County, where the unemployment rate in 2000 averaged 6.1 percent compared with 4 percent for the entire metropolitan area.

Employment growth in the financial services sector, long a dominant force in the Charlotte area economy, has slowed, paralleling the change in the national economy. The recently announced First Union-Wachovia merger is expected to affect Charlotte's banking sector. However, local real estate experts say it might take a year or more to see the impact of changes in employment and demands for office space. First Union has announced that the merged bank plans to cut 7,000 jobs over 3 years as part of the deal. Industry observers estimate eventual job losses will be closer to 10,000; the heaviest concentrations will be in the Atlanta, Charlotte, and Winston-Salem areas. An estimated 250 branch banks throughout the multistate area served by the two banks will be closed as a result of the merger.

On a more positive note, several of the more significant recent announcements regarding new job placements in North Carolina have involved the Charlotte area. The Lowe's Company plans to build its corporate center, which will employ 1,000 people, in Mooresville, just north of Charlotte; H Power Corporation has announced construction of a 250-employee facility in Monroe, just southeast of Charlotte; and Meridian Automotive Systems plans to locate a new facility in Salisbury, northeast of Charlotte.

According to Multiple Listing Service (MLS) data released by the North Carolina Association of REALTORS^®, sales volume in the Charlotte area totaled 21,364 units during the 12-month period ending January 31, 2001, a decrease of 2.3 percent from the volume a year ago. According to the NATIONAL ASSOCIATION OF REALTORS^®, the median sales price for existing homes sold during the fourth quarter was $140,900, an increase of 3.8 percent over the fourth quarter of 1999. The National Association of Home Builders reported that the median price for new sales housing in the Charlotte area was $147,000 in the fourth quarter of 2000.

Building permits for new single-family homes totaled 16,555 in the 12-month period ending February 2001, a 7-percent drop from the same period a year earlier. Much of the new construction being planned for area is near the new I-485 outerbelt around Charlotte. However, demand by many buyers for locations more convenient to employment centers is stimulating increased infill townhome and condominium development in close-in locations near the city's center.

The Charlotte rental market has become increasingly competitive during the past year. The latest Apartment Market Report from Carolinas Real Data for the Charlotte-Gastonia-Rock Hill area indicated an increase in the vacancy rate due to the large number of new units entering several submarkets. The February 2001 vacancy rate for Mecklenburg County was 8.8 percent compared with 6.6 percent 12 months earlier. Four submarkets reported vacancy rates in excess of 10 percent, and two areas recorded rates of more than 15 percent. Rent concessions are being reported by 40 percent of the communities surveyed, and rent increases have slowed. The average rent increased only 3.7 percent during the past 12 months, the second smallest annual rate of increase in the past 7 years.

There are more than 4,600 units currently under construction, and an equal number is in the planning stages. This total pipeline is equal to 3 years' worth of demand based on absorption of new units during the past 12 months. Two submarkets in Charlotte—southeast and southwest—contain half of the units under construction. Proposed developments are concentrated in the northeast, southeast, and downtown areas. If production and absorption continue at current levels, the softening rental market will become even more competitive later this year and in early 2002. The apartment vacancy rate is forecast to peak somewhere between 9 and 12 percent by the first quarter of 2002 before returning to a more balanced level in late 2002.