South: Sun Belt Sees Some Light
While it is still hard hit, compared with most of the other U.S. regions, the South, with the exception of areas like South Florida, is slightly less affected by the country's turbulent economy
Atlanta
ECONOMIC OVERVIEW
The South is experiencing both ends of the spectrum—South Florida on the downside, and parts of Texas on the upswing. It makes for quite a study in contrasts.
JOB LOSS.
This region's unemployment rate was 8.9 percent in April 2009, a number that matches the 8.9 percent experienced as a whole by the entire country for the same period, according to the Bureau of Labor Statistics. Still, this rate represents a significant increase from the region's 5.0 percent unemployment rate in April 2008.
PRICES
Providing some relief for consumers in the South, the Consumer Price Index (the prices paid by urban consumers for a representative basket of goods and services) decreased here by 0.7 percent from April 2008 to April 2009 while remaining flat on a national level.
In addition, the Gross Domestic Product (GDP) in Southern states fared somewhat better than other regions, especially in Texas, Florida, Georgia, and North Carolina. Some states, notably Arkansas and Missouri, had a poorer GDP showing, but the region is still faring better than some.
Miami
CONFIDENCE LEVEL
How do Southern consumers feel about their economy? In May 2009, only 30 percent reported that they were "confident/very confident" about the chances for a strong economy in the next six months, according to a consumer survey conducted by BIGresearch. This represents a 10 percent drop over those that felt the same way in May 2007.
PRACTICAL AND REALISTIC
A direct result of their economic downturn, over 46 percent of residents in the South report that they have become more practical and realistic in their purchases, according to the May 2009 BIGresearch survey. Additionally, over 53 percent say they are focusing more on what they need versus what they want.
HOPE SPRINGS…
"We are seeing more hesitation in the South," says Pam Goodfellow, a senior analyst at BIGresearch, "but at the same time they are more hopeful than other regions, probably in part because these states are heavily democratic and we have a democrat in the White House."
| OPTICAL FILE |
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| LENS MARKET • TRIVEX. The South is second-highest in preference for Trivex as a premium material (21 percent), and lowest in 1.60 support (11 percent), indicating that Trivex material has made headway over poly for high-impact lens materials. • FREE-FORM. With significantly higher free-form preference (27 percent versus other regions all in the teens), it appears that the South is successful in promoting free-form's features and benefits to patients. • PALS. With 70 percent of ECPs preferring PALs over other presbyopic options, the South ranks the second-highest region in its support of PALs over standard multifocals. • TINTS. In the area of add-ons, the region has the lowest photochromic preference (18 percent), and more enthusiasm for tints (5 percent) over polarized (1 percent). EDGING STATS More Southern ECPs edge in-house than anywhere else in the U.S. And, when it comes to increasing those services, the South is tops, as well, with 29 percent of practices surveyed reporting they're edging more now than last year. Southern-based ECPs may have invested in in-house finishing labs to help cut processing costs and gain more control over product quality and turnaround times. More respondents in the South edge in-house than in the other regions. 29%…more than last year 28%…same as last year 5%…fewer than last year 38%…don't edge in-house FRAME FOCUS Regardless of whether it's style or comfort in the heat determining material choice, the "Metal Rules" rule is broken in the South as a majority of these patients opt for plastic styles over metal. • MATERIALS: Plastics rule the roost with a 39 percent market share while metal falls behind at 37 percent. The South also leads the nation in rimless eyewear at 20 percent. • PURCHASE PATTERNS: The Southern market is in the number-two spot (76 percent) when it comes to buying new eyewear rather than putting new lenses in their current frames. • SECOND PAIRS: In the Sun Belt, sunwear is the natural second-pair choice, weighing in at 74 percent while the remainder split the market: casual eyewear, 14 percent; clips, 5 percent; and other, such as work eyewear and computer eyewear, 7 percent. • PRICING: Product ranges have stayed the same for 57 percent of Southern respondents. Sixteen percent are adding higher-priced options, 11 percent are adding lower-priced choices, and 17 percent are adding both to their lineups. |
RETAIL REAL ESTATE
While the overall U.S. vacancy rate for retail real estate rang in at 9.5 percent during the first quarter of 2009, the vacancy rate in the South Atlantic region came in slightly lower at 9.2 percent. Interestingly, in the Southwest region, vacancy rates tipped the scales at 12.5 percent, according to Reis, Inc., which provides updated trends and forecasts of rent, vacancy, and inventory in the real estate market.
COMMERCIAL RENTS
As might be expected in this down market, asking rents dropped accordingly. In the Southwest, they dropped 0.3 percent to $15.46 per square foot. In the South Atlantic region, asking rents fell 0.5 percent to $18.46 per square foot.
"The Southwest region currently has the lowest effective rent, but this is historically consistent as the Southwest is made up of metros with a very low cost of living," says Chris Stanley, a research associate at Reis.
Nashville
| BEST BIG BIZ CITIES |
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| In April, Forbes.com ranked the best big cities in the U.S. in which to find jobs. Surprisingly, the top five are all in one state—Texas. 1. Austin 2. Houston 3. San Antonio 4. Fort Worth 5. Dallas |
FORECAST
The forecast for these areas of the country doesn't paint a much prettier picture for the next five years.
According to Reis, the South Atlantic will see vacancy rates tip up to 11.3 percent and the Southwest will rise up to a whopping 15.1 percent as asking rents will continue to slide.
METRO MARKETS
There are some slivers of good news in the South region. According to Reis, the top five ranked metros in retail real estate inventory growth during the first quarter of 2009 were: Louisville (No. 1), Columbia, Charlotte, Charleston, and Richmond.
RETAIL CENTERS
"Places like Florida were harder hit by the housing market and that put a lot of the retail there in jeopardy and feeling the economic slowdown," says Erin Hershkowitz, a spokeswoman with the International Council of Shopping Centers. "However, our chief economist expects that by the second quarter of the year, their numbers will pick up overall and retail centers will undoubtedly survive."
FASHION TRENDS
The South has traditionally been just a few steps behind the fashion trends, but this is no longer the case. "It used to be that Texas was five years behind the times," says Paula Correri, a fashion editor with the Tobe Report, published by The Doneger Group, a retail analyst/trend forecaster for the fashion industry.
COLOR
"There are some regional differences down south—like they might gravitate more toward color," says Correri. "But they are subtle because trends are so well broadcast today."
CONSERVATIVE
Still, fashion devotees in the South do tend to lean toward more conservative styles. "We definitely tend to think of the deep south as a bit more conservative. Overall, people in the South seek out classic pieces that never go away," says Correri. "But they are classics inspired with a modern twist."
NEW CENTERS
Certain Southern cities are cropping up as new fashion centers, according to Rita Nakouzi, director of the U.S. office of Promostyl, a trend forecasting service. "Atlanta is an interesting city to start keeping an eye on; we have been watching southern Florida, and Dallas is a really cool and sophisticated fashion city. There is a lot more sophistication in Texas."
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