Employment in the 8 Southeastern States and Puerto Rico increased by 518,800 jobs (2.6 percent) from May 1996 to May 1997. Florida, Georgia, Kentucky, and South Carolina each had rates of growth that exceeded 3 percent. Puerto Rico's employment growth was also strong at 2.9 percent. Tennessee recorded the lowest rate of growth -- less than 1 percent. Alabama, Georgia, and North Carolina had unemployment rates below the May 1997 national rate of 4.8 percent.

In North Carolina job creation in emerging industries continued to offset job losses in the State's traditional industries of tobacco, textiles, and apparel manufacturing. In South Carolina Honda announced plans to build a $30 million plant in Florence County that will employ 600 people to manufacture all-terrain vehicles, and Caterpillar will build a $32.5 million heavy-equipment parts plant in Sumter County.

Homebuilding remains strong in the Southeast region. Single-family building permit activity in the region totalled 150,643 in the first 6 months of 1997, a 3-percent drop from a very strong 1996 volume for the same period. At the current pace, 1997 could surpass 1996 as the best year of the decade, so far. Activity in North Carolina in the first half of 1997 was up 4 percent to 29,091 units. A large part of the gain was due to a 13-percent increase in activity in the Charlotte-Gastonia area (7,054 homes). Although single-family permits were down 13 percent in Georgia, activity in the Atlanta metropolitan area in the first half of 1997 was down by less than 5 percent compared with first half of 1996. Activity in Florida in 1997 (45,605 units) was almost identical to the volume in the first 6 months of 1996. Miami-Fort Lauderdale, Orlando, and Tampa-St. Petersburg all reported increased activity in the first 6 months of 1997 compared with the first half of 1996.

The number of multifamily housing units authorized by permits throughout the Southeast region was up 17 percent to 50,650 units for the first half of 1997.

Reflecting the continued strength of the rental markets in North Carolina, the number of multifamily units that were issued permits increased by 22 percent to 7,746 units. The Raleigh-Durham area reported the largest increase (51 percent, for a total of 2,084 units) in the first 6 months of 1997.

Multifamily permit activity in Florida during the first half of 1997 (21,151 units) increased 32 percent compared with the same period in 1996. The trend was mixed among the larger metropolitan areas in the State. Jacksonville reported a 35-percent decline in multifamily permit activity, while activity more than doubled to 1,706 units in the West Palm Beach-Boca Raton metropolitan area. In the Miami-Fort Lauderdale area, multifamily permit activity increased by 61 percent to 6,284 units in the first half of 1997. Permit activity in the Miami metropolitan area totalled 2,343 units, almost triple the amount in the first 6 months of 1996. In Orlando the number of multifamily units permitted (2,636) in the first 6 months of 1997 was also almost triple the number of units permitted for the same period in 1996. The continued increases in multifamily construction in Orlando and Fort Lauderdale have raised concerns about overbuilding.

Tennessee multifamily activity for the first half of 1997 was down 22 percent due to significant declines in Memphis (36 percent), Knoxville (43 percent), and Nashville (11 percent). The declines reflect cutbacks in builder activity in response to the large numbers of new units that have come on the market since 1995 and the increasingly competitive conditions. The rental market in Nashville has been strong for several years. More than 6,000 units were added to the Nashville rental market in the last 18 months alone. However, with about 6,300 units under construction or in planning, several local sources expressed serious concerns about overbuilding. The market is expected to become very competitive during the next 18 months.

In the Atlanta metropolitan area, the large number of new multifamily units completed in the second half of 1996 has weakened the market. Although apartment occupancy held steady in the first quarter of 1997, concessions became deeper and more widespread. The number of multifamily units permitted in 1996 was down 18 percent from 1995 levels. Although it appears that further reductions will be needed before balance is restored, permit activity in the first half of 1997 did not slow down; in fact, permit volume (4,807 units) increased by 4.7 percent over the comparable period in 1996.

The Charleston, South Carolina, rental market is beginning to show signs of increased demand. Developers are interested in the James Island, Peninsula, West Ashley, and Mount Pleasant areas.

In Birmingham gated luxury apartment communities are making an appearance. There are currently 5 such luxury projects with more than 1,600 units under development in the south Jefferson County-north Shelby County area. The largest is the 401-unit Kenley community. The development's amenities include a business center, two-car attached garages, tennis courts, a golf driving range, and security systems. All 102 apartments completed to date have been leased. Rents at Kenley range from $565 for a one-bedroom apartment to $1,500 for a three-bedroom apartment with 2,000 square feet.

Spotlight on Greensboro, North Carolina

Job growth in the Greensboro area (Guilford County) continues at a strong pace, led by gains in construction, State and local governments, finance, insurance, and real estate. Guilford County's unemployment rate of 3.4 percent is among the lowest in the State. The local economic base continues to diversify beyond the traditional industrial sectors of tobacco, textiles, and furniture, with notable increases in the share of jobs associated with transportation, public utilities, and wholesale trade.

Stimulated by a growing local economy, the population of the Greensboro area has increased at an average annual rate of 1.4 percent since the 1990 census to an estimated 380,725 persons in January 1997. Most of the population growth in the area has been in the areas west and southwest of the city of Greensboro in the direction of High Point.

The average price for new, single-family homes was $145,600 in 1996. The most active price range is from $110,000 to $150,000. Prices of new homes are increasing at a rate of about 3 percent per year. Most homebuilding in the area is contract construction. The level of single-family home production has been consistent -- averaging between 2,800 to 3,000 units annually since 1994 -- and demand is expected to continue in that range.

The most active areas are west and southwest of Greensboro. Development interest in the southeast quadrant of Guilford County is beginning to increase because of the extension of municipal water and sewer services to this area.

According to statistics developed by the Greensboro Regional REALTORS^® Association, Inc., sales of existing homes totalled 365 units in May 1997, which was an increase of about 17 percent from May 1996. Sales prices for existing homes have been increasing about 4 percent annually over recent years.

The rental market has become more competitive, and small concessions have begun to appear. According to the Triad Apartment Association, the vacancy rate for apartments in the Greensboro area increased from 3.8 percent in April 1996 to 6.8 percent reported in April 1997. The increase in the vacancy rate was partly due to the relatively large number of apartment units completed. Taking into account the current demand for rental units and the large number of units under construction (1,600), the vacancy rate is expected to increase to as much as 10 percent within the next 12 months.