Looking toward the holidays, most respondents anticipate strong sales growth, despite this year's shorter than usual selling season. Manufacturing Factory contacts report increasing activity in early fall, with rising production and a growing volume of new orders following the modest growth posted through most of the summer. The manufacturing outlook, however, was not as optimistic as before with fewer plant managers expecting significant increases in output, orders, or employment rolls in the next few months. Moreover, several expect a moderate contraction in the factory workweek. Although contacts continue to report weakness in the region's apparel sector and are concerned about newly reported layoffs and continuing competitive pressures, other sectors appear to expand, or at least, preserve their workforces.
Contacts report that business continues to improve for plywood and building product producers.
Order backlogs for electrical equipment are up for regional plants. Reduction in paper prices is stimulating Tennessee's printing and publishing industry. Auto component suppliers are also adding to employment rolls and expanding capacity in Georgia and Alabama. The outlook for tourism and convention activity is upbeat. Tourism and business travel to Florida resorts have been stronger than expected, with a notable increase in the number of overseas visitors.