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SOUTHEAST POISED FOR ANOTHER STRONG YEAR; FIRST UNION GIVES STATE-BY-STATE OUTLOOK

 CHARLOTTE, N.C., Jan. 7 /PRNewswire/-- Strong employment growth, renewed strength in manufacturing, and population growth are indicators that the Southeast U.S. is poised for another strong year, says First Union economist Mark Vitner.
 "The relative strength of the Southeast has generated considerable attention across the country," said First Union economist Mark Vitner, writing in his 1994 forecast issue of the corporation's "Regional Economic Review." "New businesses are flocking to the region in record numbers, including the two newest entries into the National Football League.
 "Population growth has also picked up, as job seekers have fled the Northeast and West Coast in search of brighter employment prospects. The outlook for the region remains solidly positive."
 Employment in the Southeast grew 2% over the past year, nearly three times faster than the total gain registered in other states. Unemployment rates are now at or below 5% throughout the region, compared to 6.5% nationwide. Factories have added modestly to their payrolls in the Southeast while laying off more than 160,000 workers across the country.
 Production of consumers durable goods, such as cars, trucks, furniture and household appliances, is especially strong. Output of clothing and home furnishings, however, has not fared as well. Hiring in the services sector has been particularly strong in the last year, rising 5% in Atlanta, 2.8% in Florida, and 2.7% in Nashville, Charlotte and Raleigh.
 "Growth has been so strong, in fact, that we are beginning to see significant progress at removing one of the economy's biggest stumbling blocks -- high office vacancy rates," Vitner said.
 "While most of the decline has occurred in the suburbs so far office vacancy rates are currently below 10% in downtown Charlotte and have dropped to 16.5% in downtown Nashville."
 On the consumer side, Vitner noted that homebuilding is up 21.9% in Tennessee and up 19.6% in Georgia; housing starts are up 14.1% in Florida, 11% in Virginia and 7.4% in North Carolina.
 Vitner highlighted the economic recovery in four states in the newsletter; the next issue will cover North Carolina, Georgia, Maryland and the District of Columbia. This month's highlights include:
 FLORIDA -- Population has rebounded to about a 1.7% pace, with 630 residents being added daily. Businesses have added more than 110,000 jobs and the public sector is adding another 30,000. Retail spending has increased nearly 12%, and Vitner expects it to rise another 10% this year. Substantial improvement in commercial vacancy rates is expected to result in a 25% rise in commercial contracting in 1994; apartment building should double over last year's sluggish pace and single-family home starts should increase by one third to 147,000 units.
 Despite negative publicity surrounding the murder of tourists, the number of visitors actually increased by 2.5% in 1993 and should rise another 2% this year. International trade surpassed tourism as Florida's leading industry in 1993, as trade with Latin America surged. The gain in health care employment is expected to match or exceed last year's gain of 4.5%, regardless of reforms. Manufacturing in the state is better positioned than much of the nation, with a mix of industries ranging from pharmaceuticals and telecommunications gear to medical instruments, paper products and contact lenses.
 SOUTH CAROLINA -- After quickly recouping the more than 47,000 jobs lost during the recession, South Carolina's economy hit a lull in 1993, caused by a combination of defense cuts and layoffs in textile and apparel mills. Despite the lull, the state's diversified mix of manufacturing and services should produce above average job growth over the next few years. The Upstate continues to be boosted by the new BMW plant and the related suppliers it is attracting. In Greenville, jobs are expected to grow by 2.4% this year. Employment is also expected to rise in Columbia, with the recent expansion of several new firms into the area and an increase expected in government employment.
 TENNESSEE -- With an economy solidly built around durable goods manufacturing, distribution, tourism and services, Tennessee is seeing strong job and income growth and a resurgence in residential and commerical development. Business and government created more than 50,000 new jobs last year and are expected to create nearly 70,000 jobs this year. The acceleration is being driven by an improving national economy and increased consumer spending. With consumers buying more new cars and major household appliances, Tennessee's factories are boosting production and employment. Textile and apparel producers, however, continue to suffer. Retail sales, up 11.5% through the third quarter could rise even more in 1994. The financial services sector and tourism also are expected to grow. Tourism should do particularly well in Nashville and Memphis, where several attractions are being renovated and expanded.
 VIRGINIA -- Growth has been held back by defense layoffs and uncertainty about the future of several military installations. Weak oversees economies also have slowed traffic at Virginia's ports, which are the busiest on the Eastern Seaboard. Growth is expected to pick up in 1994, however, as businesses and local governments create more than 50,000 jobs, factory hiring improves, and the furniture industry benefits from recent gains in home sales. Port traffic should also pick up as the European economies strengthen later this year.
 As Sept. 30, 1993, First Union Corporation (NYSE: FTU FTUpr) reported assets of $71.4 billion and operated 1,373 banking offices in Florida, North Carolina, South Carolina, Georgia, Virginia, Tennessee, Maryland and Washington, D.C., and 218 nonbanking offices in 36 states.
 -0- 1/7/94
 /CONTACT: Sandy Deem, 704-374-2710, or Mark Vitner, 704-383-5635, both of First Union/
 (FTU)


CO: First Union Corporation ST: North Carolina, Florida, South Carolina, Tennessee, Virginia IN: FIN SU: ECO

MM -- CH002 -- 0049 01/07/94 09:09 EST
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