Economic Development in the World's Fourth Largest Economy
Click for FREE INFO on Sites in the South
Email This Page
Thursday, October 30, 2014    Login
 Summer 2014

  
 Features

Petrochemicals and the Southern Manufacturing Renaissance

Non-Petrochemicals and the Southern Manufacturing Renaissance

Ten Reasons Why Manufacturing is Booming in The South

Rick Perry

2014 Annual Directory


2014 SB&D 100 Edition

SB&D 100 Feature

Big Fish Keep Alabama's Economy Humming


Southern Economic Development Roundtable

The Best Greenfield Data Center Sites in the South

The Most Southern Place on Earth

Ensuring a resilient Delta Region by training a skilled workforce

Driving toward success in Alabama's Black Belt

Arkansas's Big River Steel has found its home in the heart of America's Delta Region

Building a healthy economy and a healthy workforce in Illinois

Innovation and collaboration are building a Work Ready Kentucky

Louisiana's industry off to a fast start

Perfected in Mississippi

Certifying Southeast Missouri and beyond

Select Tennessee sites offer competitive edge

Reshoring and its potential effect on the Mississippi River Delta region

10 TOP TENS

 Ten People Who Made a Difference in the South

Top 10 Stories in the American South

Ten Exceptional Southern markets to Locate your Reshored Traditional
Industry


If you are looking to relocate your HQ to the South, here are 10 Outstanding
Cities for your Operation that might not show up on your Radar


Ten Low Cost Manufacturing Locations to Reshore your Plant near Major
Southern airports


If these Southern Market Economies were Stocks, they would be the Ten Best
to Invest in over the next Decade


Ten Highly Creative Places to Live in the South where you can Reshore your
Manufacturing Operation


Ten more Shining Examples of Economic Development that's working in the
South


Five Outstanding Supplier Sites for Airbus and Five for Boeing

Ten Supplier Locations in the Southern Aerospace Corridor that can serve
both Airbus and Boeing

FDI Surges in the South

Tennessee: Moving in the right direction

The Northeast Tennessee Valley Comes Back Strong

The Southern Auto Corridor

It's down to the Southern Auto Corridor and Mexico for automakers

Mississippi Enters Second Decade of Assembly

BMW in South Carolina: Two decades and thriving

Nissan and Tennessee: A 30-year partnership unlike any other in North America's automotive sector

20 years of Mercedes-Benz in Alabama: A defining moment in the Heart of Dixie

The tremendous success of the Hyundai-Kia model in the Southern Auto Corridor

Ford's resurgence in Louisville

2013 Motor Vehicle Parts Supplier Guide

Community preparedness is about vision

20th Anniversary Edition


  
 Features

Spring 2011

The 2011 SB&D 100

Well, it's about time

The South Rings Up 594 Projects that Meet or Exceed SB&D 100 Thresholds. Total is the largest since 1998; 227 more big deals than last year's '100'

By Mike Randle

After collapsing beginning in 2006, the financial services sector is rebounding in the South with 27 projects of 200 jobs or more in 2010. If you don't count real estate, no industry was hammered more than financial services during The Great Recession. The sector averages 43 big deals a year and could only muster 8 in 2008. Pictured is Bank of America's headquarters in Charlotte. Well, it's about time. After four or five grueling, "can't see the light at the end of the tunnel" years, business and industrial projects are back in a big way in the American South. There were 594 projects that had announced job totals of 200 or more jobs and/or $30 million or more in announced investment in the region in calendar year 2010. Let me repeat that for those with poor vision: 594 giant projects in the South in calendar year 2010. Again, it's about time.

The huge project total means the fire is stoked in the South's economy once again. The jump in projects doesn't solve every problem that has arisen from The Great Recession, but what it does mean is that the corporate world has finally left the sidelines and put its money to work in the American South in lightening quick, massive, almost across the board fashion. Yep, it's about time.  

The total of 594 projects that meet or exceed SB&D thresholds is not only the largest since 1998; it is the second best in the history of the SB&D 100 ranking, which was first published in 1994. Last year (calendar 2009 numbers), only 367 projects met or exceeded our thresholds. That figure represented the lowest on record, 42 big projects behind the dismal 2003 SB&D 100 (2002 numbers), which was the lowest total until last year's horrific showing of 367 projects. If you recall, 2001-2003 was no picnic for economic developers in the South and elsewhere in the U.S. 

To see 227 additional large projects – 200 jobs or more and/or $30 million or more -- announced in the South in 2010, one year after the worst "100" on record, easily computes into the largest one-year increase in SB&D 100 history. That may be the most important factor of this story as we climb out of the worst recession in generations.

The good news couldn't have come at a better time. Who could have predicted such a huge increase in job-generating and capital investment projects in the American South, the world's fourth-largest economy? Well, we would like to humbly claim that we did in this same issue one year ago. Here is what we wrote in the introduction of the 2010 SB&D 100: "If the 2010 Southern Business & Development 100 is as accurate as other '100s' over the years in revealing emerging trends in the economy, then the worst economic environment since the Great Depression is now over, dead ... finito."

However, little did we know that 2010 would bring the second best year in large projects announced in the South in almost 20 years? While job totals of all projects that made this year's SB&D 100 rose to 83,739, (see Chart No. 1) -- the best performance since 2006 and the third consecutive year total jobs have increased -- they continue to be well off the pace set between 1994 and 2001 when that eight-year stretch averaged 117,534 new jobs. Why? It's simple. Technology is eliminating positions on the factory floor and in offices throughout the world.

For example, if the SB&D 100 counted robots each year like we count jobs, we could go out on a limb and predict that there has probably been a 10,000 percent increase in robot employment -- or deployment -- on factory floors in the South since we first published the SB&D 100 in 1994. In fact, robot unemployment in Southern factories is – we're just guessing here – less than one percent and would be zero percent but for a few on temporary disability until a part arrives. That's how much production we are seeing in the South right now in the manufacturing sector. Each of those robots, I should add, can replace as many as 50 to 100 factory workers back in the day if not more. It will be interesting to see how many workers they replace 20 years from now.

So, what are the reasons behind such a large increase in big deals in the South in calendar year 2010? In short, the economy is much better in the South as a whole than in other regions of the U.S. That is something that we have seen in every recession we have covered (1982-'83, 1991-'92, 2001-'02 and 2007-'09). Is everyone benefiting in the South? Not yet, but we are getting there very quickly, much quicker than just about anyone realizes. The facts don't lie.

Historically, the South is usually the last U.S. region to fall into a recession hole and the first to dig out. But this recession was different. The South fell into the abyss created by The Great Recession at the same time the other three regions did. In fact, Florida was most likely the first state in the country to fall into that deep hole created by The Great Recession, which technically began in December 2007. Yet, with this report, we can write with confidence that the South is the first U.S. region to leap out of that hole, which has been the case with every downturn we have covered since the early 1980s.

The most telling indicators that the South is back and in a big way comes from data from the traditional industries that call the South home: Automotive, distribution, energy production, food, oil and gas and chemicals. Throw in the first year that financial services even showed a pulse since well before that first big bank bellied up in October of 2008 and you have yourself a hell of a year.

Financial services used to be one of the top three job-generating sectors in the South each year over the last 20 years or so. That ended in 2006, two years prior to that first large bank going under in the financial crisis of October 2008. The banks knew they were in big trouble as early as 2006 and large employment deals simply disappeared from the sector. But with 27 big deals in 2010, 18 in 2009 after only 8 in 2008, it is easy to determine that banking, insurance and the rest are coming back in the South. And there is room for improvement. Financial services averaged 43 big deals in the region from 1994-2006.

As mentioned, total jobs created by the 2011 SB&D 100 rose by more than 5,000 to 83,739. We will take that considering job totals fell by more than 10,000 in both the 2007 and 2008 "100" rankings. The 25 projects of 1,000 announced jobs or more at the top of this year's SB&D 100 is similar to last year's 28. Those 28 in calendar year 2009 represented the largest total of deals at the top of the list since 2005 when there were 28.

Chart No. 1

Total Jobs Created by the SB&D 100 - 1994-2011

YEAR *JOBS CREATED
   
2011 83,739
2010 78,075
2009 75,211
2008 71,188
2007 82,513
2006 92,847
2005 91,135
2004 75,418
2003 68,651
2002 82,826
2001 111,758
2000 113,136
1999 116,721
1998 125,226
1997 136,442
1996 124,011
1995 118,550
1994 94,431

* Job totals are derived from announcements made in the previous calendar year. SOURCE: SB&D

SB&D 100 Methodology and State Performances: Where did all those deals go to anyway? 

Nucor is building a $1.5 billion iron and steel plant in Louisiana just west of New Orleans in St. James Parish. Pictured are Louisiana Gov. Bobby Jindal and Louisiana Economic Development Secretary Stephen Moret (second from left) with Nucor officials at the groundbreaking in the spring quarter. In last year's SB&D 100, several Southern states saw their points drop to record lows. SB&D gives 10 points for each project that makes it on the SB&D Job 100 and on the SB&D Investment 100. Those are the top 100 job announcements that are made each year in the South and the top 100 investment announcements. We give five points for every project of 200 jobs up to the threshold created by the Job 100, which this year climbed to 375 jobs. So, any project with announced job totals of 200 to 374 jobs receives five points. It's the same thing on the investment side. This year's investment "100" threshold was $102 million, so any project larger than that received 10 points. Projects of announced investment of $30 million to $101 million earned five points.

This year, there were only four states that saw their points drop and those were Arkansas, Missouri, Tennessee and West Virginia. Tennessee's drop is a misnomer. Last year it shared "State of the Year" honors with Louisiana, so its drop in points from 345 to 300 is understandable. As for Arkansas, Missouri and West Virginia, they missed out on the biggest one year increase in the number of large projects landing in the South in the 18-year history of the SB&D 100. And that is curious considering those three states have fared better than most from 2007 to 2009.

Last year 12 of the 17 Southern states lost points from the previous year, so with only four doing so this year that is significant improvement. Some states, like North Carolina, Kentucky and Mississippi saw such strong surges in the number of large projects that their point totals tripled from 2010. North Carolina's increase from 150 to 460 points from 2010 to 2011 is one of the largest one-year increases in SB&D 100 history. That is not something out of the ordinary for The Tar Heel State.

Emerging from the recession of 2001-2002 and the tough couple of years that followed, North Carolina is simply rewriting history in exactly the same way. In 2004, N.C. earned a paltry 160 points. In 2005, its point total ballooned to 460, virtually matching its huge comeback this year. That year we honored N.C.'s performance with a "State of the Year." Even though N.C. matched that incredible comeback this year, it still wasn't enough for 2011 "State of the Year."

Chart No. 2

Total Points Earned by Southern States in the 2011 SB&D 100

STATE POINTS
   
Texas 665
Louisiana 495
North Carolina  460
Tennessee  300
Georgia 280
Maryland 245
Florida 210
South Carolina  205
Alabama 200
Virginia 190
Kentucky 170
Kansas 165
Mississippi 120
Missouri 80
Arkansas 65
Oklahoma 55
West Virginia 40

SOURCE: SB&D

Maryland, Georgia, Oklahoma, South Carolina and Texas also had huge jumps in their point totals, just not of the tri-fold variety. Those that just maintained their point totals from last year included Alabama, Florida, Kansas, and Virginia, meaning those four states didn't benefit much from the uptick that swept most of the region this year.

Of that group, Alabama, Florida and Virginia are puzzling. Combined, those three states account for 10 of the 18 "State of the Year" awards by SB&D since 1994. Although Virginia hasn't competed for that recognition in 10 years (its last was in 2001), it has been a steady if not unspectacular performer during that time. Why it didn't cash in on this record year in the South is definitely puzzling.

Florida, well, that state has been a train wreck for a while now, settling for last or next to last in big deals per capita in the South for five straight years. Like Virginia, Florida's last "State of the Year" was a while back, in 2002. But unlike Virginia, there have been few if any "steady years" in its economic development performance in quite some time.

But change is in the air in The Sunshine State. New governor Rick Scott is shaking up things in Florida like no Southern governor we have ever seen just months after being elected. He has eliminating growth management regulations, cut to the bone various state agencies and programs, including education, refused federal money for high-speed rail, created a large economic development incentives fund … you name it, Scott has already done it in his first six months in office. As you look at what Scott has done, some of it on the economic development side is sound policy. Yet, his social initiatives, primarily the cuts in education, make Scott nothing less than an enigma so far.

We have no idea whether those things will help Florida or not at this point since Scott's work has been a big blur to us and most likely to every Floridian. But at least Scott realizes the shape his state is in and it's not good.

We believe the previous governor of Florida, Charlie Crist, as well as his economic development chief, John Adams, simply ignored the fact that Florida's economic development performance had been pathetic for years. You can probably say that for Jeb Bush, who was governor of Florida before Crist, in the last few years of his second term. 

While Scott has been highly controversial in his first half-year in office, one thing he has done is appoint Gray Swoope, the former director of the Mississippi Development Authority as the head of Enterprise Florida. If Swoope can't help Florida get back on its feet, then there are only a handful of others who can.

One of those who can is Neal Wade, the former director of the Alabama Development Office. We chose Alabama as "State of the Year" four times while Wade led economic development in that state from 2003 to 2010. No state economic director has helped a state to four "State of the Year" honors in the South since we first published the SB&D 100 in 1994.

Wade now works for the St. Joe Company, a Destin, Fla.-based real estate development firm that owns hundreds of thousands of acres of land in Northwest Florida. The company is moving ahead with an ambitious development adjacent to the new Northwest Florida Beaches International Airport at West Bay, which is located near Panama City. It is called Venture Crossings.

With 2,000 new hires, Austal USA's expansion in Mobile, Ala. was the fourth-largest employment deal in the South in 2010. Pictured is Joe Rella, President of Austal USA at the company's shipbuilding facility in Mobile. With Wade and Swoope now working together in Florida, surely that will give the South's most struggling state some legs. Wade and Swoope are the prototypical "big buffalo hunters," landing projects such as Hyundai, Austal, ThyssenKrupp (Wade), Toyota, Severstal and Schulz (Swoope). So we expect to see some very large, eye-popping projects in the next few years out of Florida and we expect most of them to come from the clean tech, financial services and logistics/ports sectors. Aviation and aerospace will also come in to play there as Florida rebounds.

As for Alabama, it could do no wrong for about eight years from 2002 to 2009. If it wasn't earning "State of the Year" it was posting up "Honorable Mentions," one of three or four we give out each year in the state category.

Alabama is in transition now with a new governor and a new state economic development director. The 200 points it posted this year isn't a poor score, but after last year's 175 point effort, some in economic development circles are wondering if Alabama has lost its luster.

So, where in the South did those additional 227 projects that landed on the 2011 SB&D 100 go? Of the 594 new and expanded projects that met or exceeded our thresholds, exactly 40 percent of them landed in just three states: Louisiana, North Carolina and Texas. Once again, Texas led all Southern states with 96 projects of 200 jobs or more and/or $30 million or more in investment, Louisiana posted 71 and North Carolina had 70. Tennessee, with 45 big deals, was the only other Southern state that saw more than 40 SB&D 100 projects.

Texas continued its consistent economic development performance, nearly doubling the number of projects it posted last year. Texas' economy may be the best in the nation. After all, Texas created almost 800,000 net new jobs over the last 10 years. No other state created a net gain of 100,000 or more.

If Texas' economy isn't the best in the nation, then Louisiana's is in our view. During the recession, other than for three months, every metro in Louisiana posted an unemployment rate below the national average. Since there are seven metros recognized by the Census Bureau in Louisiana and the recession lasted 19 months, that's 130 months below the national unemployment rate and only three months above it. Who would have predicted that? 

Of course, Texas' metros performed almost equally as well as Louisiana's from December 2007 to June of 2009. Yet, in calendar year 2010, with 495 points, Louisiana set the all-time record for "Points per Million" residents in the 2011 SB&D 100 with 115.4.

Chart No. 3

Southern States Ranked by Points per Million Residents 2011

  STATE DEALS POINTS *PPM
         
1 Louisiana 71 495 115.4
2 Kansas 23 165 59.6
3 North Carolina 70 460 51.9
4 Tennessee 45 300 49.6
5 South Carolina 31 205 47.4
6 Maryland 34 245 43.6
7 Alabama 32 200 43.4
8 Mississippi 14 120 41.2
9 Kentucky 27 170 40.4
10 Georgia 38 280 29.9
11 Texas 96 665 28.2
12 Virginia 33 190 24.8
13 Arkansas 12 65 23.1
14 West Virginia 5 40 21.9
15 Oklahoma 8 55 15.3
16 Missouri 11 80 13.6
17 Florida 30 210 11.6

SOURCE: SB&D

We considered Texas and North Carolina for "State of the Year" honors for the 2011 SB&D 100. Yet, "State of the Year" and "Honorable Mention" accolades on the state level are determined mostly on a per capita basis, but not entirely. 

But we do put a lot of stock in the "Points per Million" residents score. After all, West Virginia, with less than two million residents, will never compete with Texas, which has over 25 million residents, straight up. So, to level the playing field, we divide the number of residents in each state into total points earned. That gives us a "Points per Million" (PPM) residents score.

Again, no state has ever posted a PPM score over 100 points and Louisiana blew past that with 115. So, Louisiana is Southern Business & Development's 2011 "State of the Year" for the fourth time in five years, rivaling Alabama's string of top state honors when they did it five out of six years between 2003 and 2008.

Earning "Honorable Mention" in the state category this year were Texas, Kansas, North Carolina, Tennessee and South Carolina. That's the most "Honorable Mentions" (we typically honor three) we've ever given out. But then again, this was the second-best SB&D 100 since 1994, so there were some outstanding performances that could not go unrecognized.

Chart No. 4

SB&D State of the Year Winners 1994-2011

2011 Louisiana
2010 Louisiana and Tennessee
2009 Louisiana and Tennessee
2008 Alabama
2007 Louisiana
2006 Alabama and North Carolina
2005 Alabama and North Carolina
2004 Alabama
2003 Alabama
2002 Florida
2001 Virginia
2000 Tennessee
1999 Virginia
1998 North Carolina
1997 Texas
1996 Virginia
1995 Florida
1994 Texas

SOURCE: SB&D

Investment in the 2011 SB&D 100

The automotive industry came back strong once again in the Southern Automotive Corridor (www.SouthernAutoCorridor.com) with 60 huge deals to lead all industry sectors in the South in calendar year 2010. No state saw more action than Kentucky, where suppliers to Ford's $400 million, 1,800-employee expansion seemed to announce a new facility every other week. Pictured is Kentucky Gov. Steve Beshear announcing Ford's retooling of its Louisville factory last year. The investment side of this year's SB&D 100 is where the historic performance of 2010 really shined. In 2009 (2010 SB&D 100), there were 139 projects of $30 million in investment or more. This year's (calendar year 2010) SB&D 100 saw a whopping 303 projects of $30 million or more. That is an incredible increase and the largest one-year jump in SB&D 100 history on the investment side.

Total capital expenditures rose from $27.4 billion in the 2010 SB&D 100 to $35.9 billion this year, a healthy increase. The amount is the fourth-best SB&D 100 investment total in 18 years. As always, the Investment 100 was led by the energy industry, but this year natural gas dominated, the first time that has happened. Natural gas pipelines are being built throughout the region as the movement of that product derived from fracking is delivered to market.

Samsung had the South's largest announced investment project in 2010, investing $3.6 billion in its facilities in Austin, Tex. Pictured are Samsung officials at the ribbon cutting of its new addition of the Texas semiconductor plant. Last year was the first year in the South's history that more renewable energy facilities were announced in the region than fossil fuel plants. That was the case again this year as there was only a handful of fossil fuel power plants announced. The 2007-2009 SB&D Investment 100s all topped $40 billion with 2009 setting a record of $53.7 billion. The reason was the high number of coal-fired power plants that were announced.

But this year's "100" is filled with biofuel facilities, natural gas investments, solar related investments, oil and gas facilities and plant expansions from the chemical industry. It should be noted that the chemical industry surged in 2010, helping propel Louisiana and Texas to the top. And of course, automotive weighed in mightily as it always does, except for one year during the recession. But even then, automotive performed surprisingly well.

Also showing well on the investment side of the ledger this year was the semiconductor industry, led by Samsung's $3.6 billion investment at its plant in Austin, Tex. Data centers continue to be a hot sector, led by American Express and Facebook's massive investments in North Carolina.

Aviation and aerospace, metals, health care and distribution also performed well on the investment side in calendar year 2010. Distribution was one of the hardest hit sectors during the recession and with financial services showing up significantly on the jobs side and distribution returning to form on the investment side, well, that confirms that services, which were hit much harder than manufacturing in The Great Recession, are back and beginning to help drive the South's economy. During the recession, the services sector was worthless when it came to job generation in the South. It totally collapsed.

Chart No. 5

Total Investment by The SB&D 100 - 1994-2011

YEAR *TOTAL INVESTMENT
   
2011 $35.9 Billion
2010 $27.4 Billion
2009 $53.7 Billion
2008 $45.1 Billion
2007 $44.2 Billion
2006 $26.7 Billion
2005   $22.2 Billion
2004 $22.1 Billion
2003 $18.3 Billion
2002 $25.0 Billion
2001 $25.8 Billion
2000 $24.6 Billion
1999 $22.6 Billion
1998 $19.8 Billion
1997 $23.8 Billion
1996 $22.6 Billion
1995 $18.8 Billion
1994 $17.4 Billion

* Investment totals are derived from announcements made the previous calendar year. SOURCE: SB&D

Jobs in the 2011 SB&D 100

In calendar year 2009 (2010 SB&D 100) there were 228 projects of 200 jobs or more. This year's SB&D 100 saw that increase to 291, not nearly as large of a jump as what was seen on the investment side of the ledger, but still, with jobs still the No. 1 priority among states, the increase is something to write home about. Companies that were particularly active in big job-generating projects in the South in 2010 were Amazon.com, Caterpillar, GE, Convergys and Lockheed Martin, among others.

Additionally, the fact that this year's "100" saw its job threshold rise for the third straight year is also encouraging. At 375 jobs, the threshold is the highest since 2007, the last time the 400 job level was reached.

Chart No. 6

2011 Job Threshold

YEAR THRESHOLD
   
2011 375 Jobs
2010 335 Jobs
2009 310 Jobs
2008 372 Jobs
2007 400 Jobs
2006 483 Jobs
2005 450 Jobs
2004 400 Jobs
2003 320 Jobs
2002 483 Jobs
2001 600 Jobs
2000 600 Jobs

SOURCE: SB&D

Manufacturing vs. Service

As we predicted a couple of years ago, a manufacturing "beachhead" is being formed in the South. The 335 manufacturing projects in the South in 2010 that met or exceeded 200 jobs and/or $30 million in investment is the largest total in the 18-year history of the SB&D 100.The Great Recession certainly separated the men from the boys. As written, services, such a huge generator of jobs in the good times in the South, went limp in the recession. The going rumor is that manufacturing has lost so many jobs over the years that it has been fingered as the primary reason behind the recession that is now dead hopefully for good. That is simply not true. 

It was the service sector that collapsed in the Great Recession of 2007-2009. If anything, manufacturing surged, as evidenced by Chart No. 7. Not only did manufacturing take over the grip that services held in the South in the total number of deals making the SB&D 100 lists from 1997 to 2006, it saw a massive increase in productivity.

Sure, there have been millions of jobs lost in manufacturing in the South over the last decade or so. In 2000 there were 18.9 million people employed in manufacturing in the U.S. Today, that number is around 11.6 million and about 40 percent of those are in the South. But, as written earlier in this story, the blame for the lost jobs is centered on technology, not a failure of the manufacturing sector itself.

For example, 100 years ago, 30 percent of Americans worked on a farm. Today it is about 3 percent. Has America failed in the agribusiness sector? Not hardly. Unfortunately, we throw out more meat, vegetables and fruit grown in this country than many countries our size grow.

While technology is to blame for the loss of jobs in manufacturing, the credit for incredible increases in productivity also goes to improved technology. The days of millions of blue collar workers assembling or forging goods are over, replaced by a handful of people sitting in front of computer screens operating robots. That doesn't mean manufacturing isn't valuable. If anything, it makes it more valuable to states and markets in the South because more products are being produced, therefore more taxes are generated and that means more exports as well. 

Chart No. 7 also shows that manufacturing continued its five-year run of out performing the service sector in big projects in the South. Even more impressive is the fact that the South saw 335 manufacturing projects of $30 million or more in investment and/or 200 or more jobs. Would you believe that is the highest one-year total in SB&D 100 history? Well it is.

If you are a regular reader of this magazine, you will recall that when the recession started, we predicted that manufacturing would flourish in the South. We wrote that a "manufacturing beachhead" would be created in the region for a variety of reasons, but primarily because manufacturers were fleeing unionized labor in droves. The South is home to 13 right to work states, by far the most of any region of the country.

The other reason we predicted that manufacturing would form a "beachhead" in the South as a result of the recession was because the region is about the only place manufacturers can make a profit anymore in this country. The South has the lowest operating costs of any U.S. region. We made the prediction in 2008. Three years later, the 2011 SB&D 100 set an all-time record of 335 big manufacturing projects announced in the South. The "beachhead" is forming.

Chart No. 7

Manufacturing vs. Non-Manufacturing Projects: SB&D 100 1994-2011

YEAR MFG. NON-MFG. TOTAL DEALS
       
2011 335 259 594
2010 227 140 367
2009 291 138 429
2008 301 209 510
2007 257 225 482
2006 219 370 589
2005 292 297 585
2004 189 277 466
2003 164 245 409
2002 165 282 447
2001 209 312 521
2000 194 346 540
1999 228 344 572
1998 229 407 636
1997 212 361 573
1996 310 243 553
1995 281 189 470
1994 303 182 485

SOURCE: SB&D

Conclusion: The Ship has been righted

The SB&D 100 has tracked economic development trends for almost 20 years now and the 2011 "100" is right up there with the five-year run of great performances from 1996 to 2000. The only difference is the deals have slightly less job totals. In other words, a 2,000-employee project back in the mid and late 1990s is now a 1,200-employee project. Again, that goes back to improved technology that enables these companies to do more with less people.

Even the industry sectors have aligned exactly how those years performed. Automotive is No. 1 with 60 big projects, where it should be. Distribution, call centers and energy projects are also near the top where they should be and just about every other sector posted numbers that you would see in the excellent years that the South experienced more than 10 years ago. The only one that didn't perform as it did in the roaring '90s was financial services. But again, that sector is coming back.

But there is one newcomer in the top industries list (Chart No. 8) that we would also like to brag on ourselves about. Shortly after we predicted manufacturing would establish a beachhead in the South, we published an opinion piece titled, "Watch for a Slew of Major Headquarter Relocations to the South over the next 18 Months." That story was written in the spring of 2009. Check out the industry sector that is 14th on the adjoining list of the top industry sectors in this year's SB&D 100. With 24 major headquarter projects in calendar year 2010 -- most of them relocations -- the South set a record for the most headquarter deals of 200 or more jobs announced in one year. 

Unless something drastic happens, like some huge bank failures or some other economic catastrophe like the federal government defaulting, we expect this run to continue into next year and beyond, some of it at the expense of other regions in the U.S. State tax rolls are expanding, as are many local ones. Times are good, but the biggest obstacle right now is hardly anyone knows it because this last recession was so long, so deep and so brutal that I am sure many economic development officials and politicos in the South have developed shell shock from it.

Without question, the first significant rebound from The Great Recession has occurred and it was more than significant, it was huge. Again, facts don't lie or mislead. Those states and communities that were not ready for the rebound, those that have closed the hatch and lost their edge in aggressive recruiting efforts, had better remember the incredible performance seen in the 2011 SB&D 100. Because, barring some economic calamity, this run is going to continue this year and into next year. The South, as a brand, is that hot right now. It's about time.

Chart No. 8

Top Industries 2011 SB&D 100

  INDUSTRY DEALS
     
1 Automotive 60
2 Distribution 56
3 Call Centers 46
4 Energy 45
5 Food 44
6 Oil & Gas 43
7 Chemicals 38
8 Health Care 37
9 Building Materials 31
10 General Manufacturing 28
11 Financial Services 27
12 IT/Telecommunications 27
13 Aviation/Aerospace 25
14 Headquarters 24
15 Electronics 18
16 Data Centers 15
17 Universities 13
18 Wood Products 13
19 Biotechnology 11

SOURCE: SB&D


  
 Southern Auto Corridor

Southern Auto Corridor.com

Steering the Automotive Industry to the World's Fourth-Largest Economy

www.southernautocorridor.com


  
 SmallTownSouth

SmallTownSouth.com

Opportunities in the South's Rural and Urban Small Towns

www.smalltownsouth.com


  
Southern Business & Development Southern Auto Corridor Small Town South Randle Report