Suggested reasons for the boom are a good climate, low labour costs, the developing virtuous circle of growth and the spirit of community. In a bizarre hangover from the old plantation days, it is also suggested that there is a tradition of paternalism which has made it impossible for unions to gain a foothold, attracting big companies from the union-dominated North. Whatever the reasons, there are rich stock market pickings, with the area producing some great success stories in recent years.
Ironically, the most famous Atlanta-based company and one of the greatest growth stocks of the past decade is Coca-Cola, which now makes 80 per cent of its profits outside the US. Growth should continue, with production starting in India, a dollars 1bn ( pounds 660m) expansion drive in Eastern Europe, and dollars 150m to establish a toehold in mainland China. Sales should also continue to soar in Florida, which has become the world's number one tourist destination and where our own Rank Organisation is planning to spend hundreds of millions of pounds on a theme-park venture with Universal Studios.
Other great US growth stocks with a strong base in the South-east include Home Depot, a superbly run DIY chain where earnings per share are expected to rise from dollars 0.82 to dollars 1.05 and dollars 1.45 over the next two years, maintaining a long record of exceptional growth. The performance needs to be good, with the shares at dollars 45 on a historic PE over 40.
Meanwhile, Albertsons is a supermarket group with a strong south-east bias and a remarkable record. The shares are dollars 53, with earnings expected to grow from dollars 2.09 to dollars 2.80 and dollars 3.20.
An exciting high-technology play is Scientific-Atlanta, which supplies equipment for satellite and data communications and cable TV. It has been selected by Time Warner to develop in-home terminals for a 'full service network', comprising digital video, audio and telephone, in Orlando, Florida. At dollars 30, the highly rated shares are supported by hopes of earnings more than doubling from 1992's dollars 0.47 over the next two years.
Proof of what can be achievedis supplied by the astounding Tech Data, a Florida-based company that distributes computer peripherals supported by technical advice and seminars. Since 1990, the share price has climbed from dollars 2 to dollars 28, helped by a sixfold growth in earnings with further strong gains expected.
One way of locking into strong growth in a region is to buy shares in local utilities and banks. There is a good selection for the south-eastern US led by Bell South, one of the Baby Bells that provides telephone services. It yields 5 per cent at dollars 55 and is expected to grow at a 5 per cent rate in future years. Utility shares have done well in the US, with their yield attractions highlighted by low interest rates. But the growth has been good as well. For example, one of the local power companies, Teco Energy at dollars 26 to yield 3.7 per cent, has lifted dividends every year from dollars 0.29 in 1977 to dollars 0.90 in 1992. Rises to dollars 0.95 and dollars 1 are expected in the next two years.
Among banking shares, one of the best bets looks to be Synovus Financial, at dollars 20, which controls 31 banks in Georgia, Florida and Alabama and is expected to grow earnings from dollars 0.92 to dollars 1.10 and then dollars 1.30 over the next two years. US banks generally seem to be moving from bust to boom with amazing speed, helped by a Federal Reserve policy of encouraging higher profit margins to rebuild bank balance sheets.
One of the most exciting Florida-based companies is Danka Business Systems, a UK-registered company but with 95 per cent of its turnover in the US. I first wrote about Danka shares in January, since when they have doubled to dollars 2.80. The group specialises in supplying and servicing photocopier and fax machines, with more than 80 per cent of revenues drawn from recurring maintenance income. Growth has been fuelled by a string of acquisitions, which have made the group the number two player in a highly fragmented market. The latest surge in the share price reflects the strong institutional response to a secondary offering of shares in the US, launched to reduce debts and to pay for a plain paper fax business with huge scope to boost profitability. Forecasters are looking for earnings to reach dollars 1.10 in the year to March 1994 and dollars 1.45 the following year, against an ADR price of dollars 32.50. They reckon the shares have further to climb.
Danka features in a list of 20 shares selected by US stockbroker Baird as being among the 20 most profitable companies in the US. The other southern-based company on the list is Florida women's fashion chain Chico's Fashions, where the shares have climbed from dollars 17 to dollars 34.75 since flotation last March.
The company is said to have a highly successful sales strategy and earnings are forecast to reach dollars 1.08 this year and dollars 1.30 next to maintain a pattern of consistent strong growth.Reuse content