Nonagricultural wage and salary employment in the Southeast/Caribbean region was up 2.2 percent, or 519,400 jobs, in the 12-month period from June 1998 to June 1999. The biggest percentage gains were in Florida, 3.5 percent; Georgia, 3.1 percent; and South Carolina, 2.7 percent. The services and trade sectors accounted for 75 percent of the gains in the region. Construction employment recorded the largest percentage increase, 5 percent. The lowest unemployment rate in the region was in North Carolina, 3 percent. Unemployment rates below 3 percent were reported for many of the region's metropolitan areas, with Raleigh-Durham-Chapel Hill, North Carolina reporting the lowest, 1.5 percent.

Significant new job announcements in the region during the second quarter included American Honda Motor Corporation's plans to invest $400 million to build a new plant in Lincoln, Alabama, about 45 miles east of Birmingham. The plant will begin production of either minivans or sport utility vehicles in 2002, employing about 1,500 by 2003. The Appalachian region of Kentucky received a boost with the announcement by Sykes Enterprises, Inc. that it will build technical support centers in Pikeville (Pike County) and Hazard (Perry County), employing approximately 100 persons at each location by the end of the year. The company has customer service call centers across the Nation and around the world. North Carolina's rural areas face a particularly challenging future as they attempt to respond to recent plant closings and layoffs, depressed agricultural prices, and a changing tobacco industry. The governor has appointed a task force to develop a strategy for assisting these areas.

Residential building activity remained strong in all of eight States through the second quarter of the year. Building permits were issued for approximately 179,000 single-family homes in the first 6 months of 1999, an 11-percent increase over the same period in 1998. Through the second quarter of 1999, the annual rate of sales of existing homes in the Southeast region's eight States was up 12 percent to 1,355,400 homes, compared with the first quarter of 1998. Florida, Georgia, North Carolina, and Tennessee recorded double-digit increases over near record level volumes of 1998.

Multifamily building permit activity in the first half of 1999 was down more than 20 percent in Alabama, Mississippi, Kentucky, and Tennessee. Activity remained strong in the high-volume Florida and North Carolina markets, where activity was up 33 and 50 percent, respectively. Multifamily activity in the Atlanta metropolitan area through June was up 10 percent.

In Orlando market conditions have become looser over the past 12 months. The apartment vacancy rate is currently around 8 percent. Approximately 10,800 multifamily units are under construction in the metropolitan area and about 75 percent are expected to come on the market during the next 12 months. As a result, the market is expected to be very competitive for at least the next 12 months. In the Tampa-St. Petersburg-Clearwater metropolitan area, multifamily activity in 1997 and 1998 totaled 13,525 units and the high volume has continued into the first half of 1999, with permits issued for more than 4,200 units.

In the Greensboro area, the substantial increase in first-time homeownership, together with a large supply of new units entering the market, has resulted in a short-term oversupply. The apartment vacancy rate in the area was up to 8.2 percent as of March 1999, the highest recorded in the area in the past 6 years. The vacancy rate could climb to as high as 10 percent before the market becomes balanced.

Spotlight on Lexington, Kentucky

The Lexington metropolitan area has a strong and relatively diverse economic base. Nonagricultural employment for the 12 months ending June 1999 was 284,300, up 8,100 jobs or 2.9 percent from June 1998. The area had a low unemployment rate of 2.1 percent in June. The labor market may become even tighter when Lexmark International, a printer manufacturer and Lexington's largest private employer, completes a recently announced expansion that will add up to 700 more jobs over the next few years. Amazon.com, a distributor of books and music, also announced plans in May for a distribution center that will add 500 jobs in Lexington.

From 1990 through 1998, the population of the metropolitan area grew 11 percent to 450,000 persons. Several of the area's outlying counties recorded significant rates of growth. Scott County, location of the Georgetown Toyota Plant, grew by 29 percent during the period. Madison County's population increased by 15.6 percent and Jessamine County's by 19.7 percent. As Lexington struggles to protect and preserve its historic horse farms, land for residential development has become increasingly expensive. Debate in Lexington as to how to preserve the horse farms and yet allow development to continue has resulted in a comprehensive land use plan that will allow approximately 5,400 acres of rural land to be utilized as an urban expansion area.

Future residential development may be centered in two new, large-scale developments. The Reynolds Road Development, located in southwest Fayette County, is planned for 330 single-family homes and townhouses and includes 10 acres for apartment development. Land has also been designated for churches, retail establishments, and office and industrial development. Approximately 120 acres will be used for parks and possibly a school. Hamburg Place is located on the east side of Lexington on land that was one of Lexington's premier horse farms. Initial plans for part of the 1,900-acre development include 350 single-family homes and up to 400 apartment units, as well as some retail space.

The housing sales market remains healthy. From 1992 through 1997, single-family permit activity averaged 2,825 homes annually. In 1998 activity increased 17 percent to 3,377 homes and totaled 1,697 homes during the first 6 months of 1999, up 7 percent over the same period in 1998. According to the Lexington-Bluegrass Association of REALTORS^®, sales for the first half of 1999 totaled 3,271 homes, almost unchanged from the same period last year. The median single-family sales price for the period was up 3 percent to $115,900 from the previous year. The highest volume of sales has been in the $100,000 to $119,000 price range.

Multifamily housing permit activity reached a high for the decade in 1998, with a total of 1,474 units. During the first 6 months of 1999, permits were issued for 393 units. At this time the rental market in Lexington/Fayette County is balanced.