The Federal Reserve Board eagle logo links to home page

Beige Book logo links to Beige Book home page for year currently displayed September 8, 2004

Federal Reserve Districts

Sixth District--Atlanta

Skip to content

New York
St. Louis
Kansas City
San Francisco

Full report

Business contacts indicated that economic activity in the Sixth District remained positive during July, but noted some unevenness in August, separately from disruptions caused by Hurricane Charley in parts of Florida. District retailers reported that sales were robust in July, and mixed in August. Residential housing activity continued at high levels, although several contacts noted some signs of deceleration in August. Reports on tourism and transportation services were mostly positive. Several manufacturers and transportation service providers reported improved demand conditions. Business contacts noted continued caution overall, but indicated that the prospects for hiring were improving. Employment services reported an increase in the number of permanent placements. Price increases were reported in energy and building materials.

Consumer Spending

District contacts reported that July retail sales exceeded year-ago levels. Most of the stronger reports came from Florida and Georgia retailers who benefited from statewide tax holidays. Reports on August sales were more uneven and several merchants reported that inventories were higher than anticipated. In Florida, pre-storm spending on emergency goods and repair purchases after the hurricane may turn out to be more significant than the direct loss of sales due to the storm. However, significant out-of-pocket repair bills will act as a drag on consumer spending in the effected areas going forward. July and August auto sales in the District improved slightly from previous months, but most dealers reported that inventory levels were higher than expected. Light trucks and SUVs continued to lead sales.

Real Estate

District single-family housing markets remained robust overall during July, but some contacts noted a deceleration during August. Builders reported that home construction was similar to year-ago levels in August, but that new home sales were uneven. Similarly, reports from Realtors indicated that existing home sales in August were mixed. The strongest reports came from Florida builders and Realtors, who also noted that home inventories were still low. Increased building activity associated with the hurricane will likely put additional strain on construction material and labor resources in Florida. Activity in District commercial real estate markets remained at low levels, while modest improvements in leasing activity were noted.


Continuing strength in residential building helped boost manufacturers of lumber, building supplies, furniture, and carpet during July and August. Rebuilding from hurricane damage in Florida is expected to further stimulate these sectors over coming months. Contacts reported new investment in vehicle assembly and parts manufacturing, and some shipbuilders and aerospace firms were expanding because of military contracts. A paperboard and packaging producer reported an increase in new orders and has added staff as a result. However, employment in the apparel industry continued to slide, and contacts in some other industries reported that they remained cautious about expansion and hiring.


Most District transportation contacts reported improving conditions in July and August. Strong demand for trucking services reportedly permitted service providers to pass on higher fuel costs to customers. Some truckers in Georgia and Florida were also busy addressing demands from disaster relief agencies. Domestic and international air transportation services reported strong demand in Atlanta and Miami.

Tourism and Business Travel

Reports from the District's tourism and hospitality industry remained upbeat. Most central Florida tourist attractions closed for only one day because of the hurricane, and damage to the theme parks was reportedly limited. Reports from other parts of the District indicated that bookings for conventions and business meetings for upcoming months were continuing to strengthen.


Responses from the financial sector were mostly positive. Reports indicated that deposit flows were steady and delinquencies remained manageable. In Florida, several banks offered special financing arrangements, such as deferred loan payments to victims of the hurricane. Storm-related insurance payouts were boosting deposits there as well. In parts of the District, bankers noted improvement in demand for industrial and commercial loans, but most contacts indicated that businesses were continuing to approach expansion and major spending cautiously. Venture capital investment activity in the District remained restrained.

Employment and Prices

District staffing firms reported that the pace of transition from temporary to permanent jobs was accelerating. Demand continued to be particularly strong for healthcare workers. Manufacturers added jobs in the auto and defense-related industries, but apparel firms continued to shed employees. By some accounts, Hurricane Charley's net impact on employment over coming months will likely be modestly positive. Increased hiring in disaster relief services and in construction should more than offset direct temporary layoffs in tourism and retail sectors. Industrial contacts continued to express concern over higher energy costs. For instance, manufacturers of plastics reported that petroleum-based input prices have "skyrocketed" in recent months. Storm-related construction in Florida is likely to put further upward pressure on lumber, cement, and labor costs.


Hurricane Charley caused heavy losses in three of Florida's major citrus producing counties. The USDA estimated that the storm ruined around 20 percent of this year's citrus harvest, including about 10 percent of the orange crop. Futures prices for orange juice increased from recent lows, although high inventories reportedly moderated the size of the increase.

Return to topReturn to top

Previous Richmond Chicago Next

Home | Monetary Policy | 2004 calendar
Accessibility | Contact Us
Last update: September 8, 2004