The South: Partly Sunny
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
ECONOMIC OVERVIEW
Neither the best nor the worst region in terms of unemployment, the South falls right in the middle. Still, consumer confidence remains the highest in the country—though the impact of BP's oil spill on coast economies has yet to be quantified.
JOB LOSS
The South held its own with a jobless rate of 8.9 percent in April 2010, according to the Bureau of Labor Statistics (BLS). This number remained unchanged from the unemployment rate a year earlier. Some states, such as Alabama (11 percent in April 2010), Washington, D.C. (11 percent), and Florida (12 percent), saw tougher times. This was countered by those states that were spared from high unemployment rates, such as Arkansas (7.8 percent).
CONFIDENCE FACTOR
A moderate jobless rate helped boost consumer confidence here in the South. According to the BIGresearch, 34.1 percent of Southerners surveyed felt “Confident/Very Confident” about the chances for a strong economy in the next six months. This number, which is the highest of any region in the country, jumped up from 25.9 percent in April 2008.
People in the South are also less concerned about being laid off—only 3.8 percent were worried about losing their jobs.
Dallas
Atlanta
SPENDING OUTLOOK
Packing a healthy consumer confidence and fewer fears about job loss, Southerners are a bit more relaxed about their spending.
Still, practicality is a virtue here—61.2 percent have focused more on what they “need” versus what they “want” in the past six months.
Additionally, according to the BIGresearch survey, just over 46 percent say they have become more budget-conscious in the past six months.
COST OF GOODS
The South's Consumer Price Index (CPI/the prices paid by urban consumers for a representative basket of goods and services) inched up 0.1 percent in April, according to the BLS. The rise in costs was largely due to increases in prices for transportation and medical care that were slightly offset by lower costs for recreation and apparel.
OPTICAL FILELENS MARKETThe South has decreased in two areas this year versus 2009. Its percentage of free-form produced lenses went from 27 percent to 25 percent, and the popularity of AR as the top add-on dropped from 75 percent to 65 percent. • PHOTOCHROMICS. That said, the region led the nation in photochromic sales with 26 percent of respondents viewing it as their most-sold extra. The South also leads in 1.67 lenses—with 24 percent citing 1.67 as their most-used premium material. Why the drop in free-form and AR? Perhaps Southern patients on limited budgets shifted their premium lens investment from free-form and AR to photochromics, viewing the changing lenses as the “one lens does it all” solution for one pair of eyewear. • KIDS AND COMPUTERS. More than half of the respondents (56 percent) said computer vision is the fastest growing specialty category. That's followed by children's vision, which 26 percent cited as key to practice growth. • PALs. Both PALs and multifocals have held steady in the South this year compared to last, with 70 percent of respondents preferring PALs over other presybopic options for both years. |
FRAME FOCUSA mix of daring and conservative, the South's frame wearers are just saying yes to plastic and combination eyewear while also opting to refill their existing frames with new lenses more than anyplace else in the U.S. MATERIALS: With hip young audiences in Austin and Miami, style is on the move in the South with sassy and classy plastic frame sales growing by four percent and metal looks staying relatively flat at two percent growth. This region lost five percent of its rimless share (15 percent) turning instead to metal/plastic combinations and semi-rimless looks. PURCHASE PATTERNS: Whether it's benefit issues or an ongoing fiscal focus, the number of patients who refill their current glasses with new lenses rose by one point to 25 percent. SECOND PAIRS: Surprisingly, sunglasses lost some ground in the sunny South as a second-pair sale (69 percent). The big winner was casual eyewear with a 10-point jump to 24 percent. Also keep an eye on computer glasses and readers, which were 6 percent of second-pair sales. PRICING: The South got into the swing of new pricing this year, with 48 percent reporting the same prices this year over 57 percent staying the same in 2009. Expansion covered higher prices (20 percent), lower prices (15 percent), and both higher and lower prices (18 percent). |
EDGING STATSThe South leads the country, with 26 percent of respondents saying they are doing more in-office finishing than last year. 28%…same as last year 26%…more than last year 9%…less than last year 38%…do not edge in-office |
RETAIL REAL ESTATE
While the South Atlantic displayed a troublesome commercial real estate market, the Southwest's woes have rivaled even those of the Midwest. Vacancy rates have soared in both areas while asking rents remained relatively stable over the past few years.
VACANCY RATES
Oversupply from the Southwest's recent building boom was likely the cause of this area's skyrocketing vacancy rates in the retail real estate market. Hard hit by the economic downturn, the Southwest saw a 13.2 percent vacancy rate in the first quarter of 2010, according to Reis, Inc. This number was up significantly from the 11.4 percent for the same period two years ago.
“There is no part of the country that has done well, but some, like the Southwest and South Atlantic, performed worse than others,” says Ryan Severino, an economist with Reis.
Though not hit quite as hard as the Southwest, the South Atlantic still reported a 10.6 vacancy rate for the same time period.
Knoxville
RENTS
As for asking rents, the Southwest reported the lowest asking rent of any region in the first quarter of 2010 ($15.41/sq ft). The South Atlantic had a higher asking rent ($18.07) in the first quarter of this year, which was nonetheless a dip from $18.63 in first quarter of 2008.
METRO MARKETS
Even thought the retail real estate market was hard hit in this region, there are still a few up-and-coming markets to keep an eye on.
CITIES TO WATCH
Atlanta's vacancy rates remained flat in the first quarter of 2010, a positive sign in today's market. This city also had one of the country's top retail building sales—the Park Place Shopping Center, an 82,097-square-foot property that sold for $28.5 million.
The Dallas/Fort Worth area boasts one of the most active construction markets in the country. In the first quarter of 2010, a total of 13 retail buildings (395,980 square feet) were delivered to the Dallas market.
The Knoxville, Tenn., market, which had a low vacancy rate of 5.7 percent in the first quarter of the year, actually saw an increase in asking rent—$13.09 per square foot.
FASHION TRENDS
The proliferation of style information via the Internet and other media has brought the South right into the forefront of the fashion world. Like each region, however, the South has its own interpretation of each season's fashion trends.
For example, the fall's ladylike trend will take an even more feminine tack in the South. “The South tends to be more colorful, so women here will likely embrace sweeter colors with this trend,” says Rita Nakouzi, director Promostyl Americas, a trend forecasting service based in New York City. “There is a little bit more of Americana here and a conservative approach to trends on the whole.”
Nakouzi adds that the region's refined culture will influence its attitude about fashion. “People here are living more consciously, not excessively.”
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