In the Southeast region, average nonagricultural employment for the 12 months ending June 2002 was down 0.6 percent compared with the 12 months ending June 2001. All States except Florida experienced declines of approximately 1 percent. The biggest drop, 1.7 percent, was in Georgia, where every sector except government recorded a loss. The decline reflects the economic change in the Atlanta metropolitan area. The tourism industry in Florida has recovered some of the initial losses suffered in the immediate aftermath of September 11, but most reports show activity still significantly below previous year levels. However, gains in the services sector contributed to an increase in employment in Florida of 0.3 percent for the 12-month period.

In most areas, unemployment rates in June were higher than figures recorded for June 2001. The highest rates were in North Carolina and Mississippi at 6.7 percent and 6.5 percent, respectively. South Carolina’s 5.5-percent unemployment rate was unchanged from June 2001.

The Center for Economic Studies at Wake Forest University reports that, unlike the national economy and the other seven southeastern States, North Carolina’s unemployment rate now exceeds the peak reached in the previous business cycle. The decline in real personal income has equaled that of the recession in the early 1990s. The center forecasts a gradual recovery in jobs and income through next year, with unemployment beginning to decline this summer. The Raleigh-Durham economy has already begun its recovery from the recession and the economic downturns in Charlotte and Greensboro appear to be near bottom.

Employment in Mississippi’s manufacturing sector continues to decline, with 14,500 fewer workers, or 6.5 percent, during the 12-month period ending June 2002. This follows a decrease of 16,200 workers, or 6.8 percent, during the 12-month period ending June 2000. Particularly hard hit have been the State’s rural areas, where durable goods manufacturers cut back operations during the current recession and textile and apparel firms closed and moved operations to Mexico and Asia.

The most significant job announcement in the region during the second quarter came from Honda, which plans to double production capacity for its Odyssey minivans and V-6 engines and add 2,000 jobs to its plant in Lincoln, Alabama. With Mercedes-Benz in Vance, Toyota and Navistar in Huntsville, and Hyundai in Montgomery, the number of automotive jobs in Alabama in 2001 was estimated at 27,000 direct employees and 48,000 indirect jobs, with a total payroll of approximately $2.8 billion. Honda’s northeast Alabama location has also helped generate $200 million in investments from suppliers in Georgia and approximately 2,100 jobs in the Rome area. Other significant recent developments include the opening of American LaFrance’s new headquarters and manufacturing facility in North Charleston, South Carolina. The plant produces firetruck bodies and ambulances. Custom cab manufacturing and final truck assembly are scheduled to be added at the facility in 2003. The company expects to employ approximately 900 workers by 2004.

Residential building activity in the region for the first 6 months of the year was up 5.3 percent over the first 6 months of 2001, with both single-family and multifamily housing contributing to the increase. All States recorded increases in the number of permits for single-family homes. The annual rate of sales of existing homes in the region, as reported by NAR, was up 4 percent to 1,439,800 homes as of the second quarter.

In Florida, single-family housing production for the first 6 months of this year, as measured by building permits, rose 9 percent compared with the first half of 2001. The availability of financing at low interest rates is overriding any concerns about the local and national economy. The Florida Association of REALTORS^® reported that the number of existing homes sold in the first 6 months of 2002 was 8 percent above the number sold in the same period in 2001. At least one observer reports significant investor activity in the single-family sales market as investment funds flow from more traditional investments. The Home Price Index, published by OFHEO, indicates that prices of existing homes continue to increase. Through the first quarter of 2002, home prices increased 10.5 percent on an annual basis, compared to 8.8 percent 1 year ago.

Data available from the North Carolina Association of REALTORS^® for the first 6 months of 2002 indicate a robust 5-percent increase in the annualized rate of existing home sales compared with last year. Sales increased in 12 of the 16 markets monitored, with the most rapid increases occurring in the central and northern coastal areas, the Asheville metropolitan area, and the Greensboro/Winston-Salem/ High Point metropolitan area. Average values of existing homes sold were up by 0.7 percent statewide, with 10 of the 16 areas reporting increases. Second-home and retirement-oriented construction along the northern coastal areas resulted in the most significant increases. Sales prices in the Outer Banks area averaged the highest of any area in the State at more than $348,000, up 25.8 percent from a year ago. Average prices in the State’s metropolitan markets during the first 6 months of 2002 ranged from approximately $97,400 in the Fayetteville market and $156,350 in the Greensboro/Winston-Salem/ High Point area to $184,000 in the Charlotte area and more than $189,500 in the Raleigh-Durham area.

Multifamily construction in the Southeast region, as measured by building permit activity, increased modestly during the first 6 months of 2002 compared with last year. Approximately 57,000 units were permitted, 3 percent more than during the first 6 months of 2001. Every State except North Carolina and Tennessee recorded an increase. In North Carolina, activity declined by 40 percent, with 6,339 permitted during the first 6 months of 2002. In Tennessee, activity dropped by 48 percent, with almost all of the metropolitan areas experiencing a decline. In Memphis the market is recovering from a peak of 4,200 units permitted during 2000. Through June 2002, only 350 units were permitted in the Memphis metropolitan area.

In Miami, where the economy is among the strongest in Florida, multifamily building permit activity production increased 22.5 percent through the end of June. However, the increase is a reflection of the low level of first-half activity in 2001, not of increased demand. Sources expect total activity in 2002 to be comparable to last year’s total. Occupancy as of the second quarter was 96 percent. The average rent as of the second quarter was $950, up 4.7 percent from a year ago.

In Jackson, Mississippi, the number of multifamily units permitted through June 2002 was 1,149, significantly higher than the 427 units permitted during the previous 12-month period. The increased activity is a result of the Nissan assembly plant currently under construction in Madison County. Nissan announced in June that the plant will be expanded beyond the originally planned $930 million investment and estimated 4,000 jobs. The additional $500 million capital expenditure will allow the addition of the Altima sedan to the production line and will result in another 1,300 jobs.