The first two months of 2013 have brought a batch of good economic news about the South. Manufacturing activity, existing home sales and single-family-home construction starts all are on the rise – important signs the region’s economy and, by extension, its commercial real estate markets are on the upswing.
Manufacturing activity in the Southeast declined in the latter part of 2012, but February marked the third consecutive month of increase in the Southeast Purchasing Managers Index (PMI), which measures the strength of the manufacturing sector in the area covering Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee. February also marked the second straight month the index was above 50 (a score above 50 means the sector is expanding, while one below 50 indicates it’s contracting). According to the Federal Reserve Bank of Atlanta, February marked the highest month for the Southeast PMI since May 2012 and was also the first month since last September that the index was higher than the national PMI.
Additionally, both the sales of existing homes and single-family construction starts experienced double-digit increases in February on a year-over-year basis. For example, the sales of existing homes in the South jumped nearly 15 percent in February when compared to the same month in 2012, and single-family home starts spiked by just more than 33 percent. This is especially encouraging news, as the residential home sector’s impacts on the economy as a whole are undeniable.