Dennis Lockhart

Dennis Lockhart, president and CEO of the Federal Reserve Bank of Atlanta, unabashedly invited his Canadian hosts at the chartering ceremony of Southeastern United States-Canadian Provinces Alliance in Montreal Nov. 16 to look into buying second homes in the Southeast.

Toward the end of his comments outlining the strengths and challenges of the Southeast’s economy, he turned salesman for a split second, saying that in view of the strong Canadian dollar and the weak housing market, “the Southeast has the potential to benefit from second-home residential investment by Canadians.”

Besides the attraction of a fairer climate in the winter, he added that Canada's demographic profile is slightly older than that of the U.S. and responsible in part for an already established trend.

Mr. Lockhart concluded his remarks at the Intercontinental Hotel by praising the alliance, saying he believes it “will provide concrete economic benefits to everyone involved.”

While the Federal Reserve System's Sixth District, which includes Alabama, Georgia and Florida and parts of Tennessee, Louisiana and Mississippi, does not align itself perfectly to the six U.S. states involved in the alliance with the seven provinces, he said his references to the region would also include North and South Carolina, making for a better fit.

In terms of economic output, he said that the Southeast’s economic output was roughly $2.3 trillion, comparable to that of the United Kingdom.

Among its strengths, he cited an influx of people moving to the region for a current total population of about 58 million. Along with the weather, a favorable lifestyle and economic opportunity, he added that the presence of many high-quality educational institutions is important in attracting people to the region.

According to Mr. Lockhart, included in the regions’ main “growth clusters” are aerospace and engineering around Huntsville, Ala.; bioscience around Raleigh-Durham, N.C.; banking in Charlotte, N.C.; healthcare and hospital management in Nashville, Tenn.; logistics in Atlanta and tourism and gambling on the Mississippi Gulf Coast.

Florida also is a major tourism state and is part of Mr. Lockhart’s district, but it did not participate in the alliance.

He also said that the Southeast has 15 of the U.S.’ largest ports in terms of international trade.

He called trade in automobiles and vehicles between the Southeast and Canada “brisk, with growing shipments from the Southeast into Canada – a positive outgrowth of the region’s vibrant vehicle parts and manufacturing industry. Outside the upper Midwest, the Southeast is the auto industry’s second home in the United States.”

Among the region’s weaknesses, he cited the loss of factory jobs, particularly in the apparel and textile industries, with many workers not adjusting to changing technologies and competitive pressures.

He also cited poor educational standards from kindergarten through the 12th grade, especially in rural areas, as well as residential overbuilding and problems associated with a severe drought.

Concluding that the Southeast’s strengths “far outweigh its challenges,” he added that Canada and the Southeast are both well positioned to benefit from the interconnection of their economies through trade investment and collaboration.”

The alliance is comprised of Alabama, Georgia, Mississippi, North and South Carolina, and Tennessee in the Southeast, and the seven Canadian provinces of Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island and Quebec.