Fall 2009

For more information on economic development in the South, go to www.SB-D.com, www.SouthernAutoCorridor.com and www.SmallTownSouth.com.

So, how bad was it?

While the two-year recession is likely over, there’s no question that the roughest part of it was between October 2008 and October of 2009. During that time, the nation lost almost 5.3 million jobs. Of those, 1.85 million jobs were lost in the South, or about 35 percent of the nation’s total. It should be noted that the South is home to slightly more than 40 percent of the U.S. population. The adjoining chart shows employment growth rates and lost jobs in each Southern state between October 2008 and October 2009.

Total Employment Growth October 2008 to October 2009

State	Rate	# of Jobs Lost
Maryland	-2.0	-51,200
Louisiana	-2.3	-44,000
Arkansas	-2.4	-28,500
Virginia	-2.4	-89,000
Oklahoma	-2.7	-43,400
Missouri	-2.8	-77,500
Texas	-2.9	-307,200
West Virginia	-2.9	-22,200
Mississippi	-3.0	-33,600
South Carolina	-3.2	-60,000
Tennessee	-4.0	-110,600
Kansas	-4.1	-57,800
Florida	-4.4	-339,600
Kentucky	-4.4	-81,900
North Carolina	-4.5	-185,800
Alabama	-4.8	-95,300
Georgia	-5.6	-228,000
South:	-3.4	-1,855,000
U.S.	-4.0	-5,265,000

Source: Bureau of Labor Statistics

Deals are Back!

Take a look at the 10-largest job generating announcements made in the South in the fall 2009 quarter. You can find the list on page 72. Over the last four quarters, not including the fall, or since the economy really tanked, those 10-largest job announcements totaled 5,331 jobs (fall 2008); 7,700 jobs (winter 2008/2009); 9,850 jobs (spring 2009); and 7,574 jobs (summer 2009) respectively. In the recently concluded fall 2009 quarter, the 10-largest job generating announcements are projected to create exactly 15,000 jobs. Not only that, six of the 10 came from the automotive sector, which is even more encouraging.

Now, we know you can't judge whether an entire regional economy is back on its feet from just 10 big economic development deals. However, here is an interesting bit of research: SB&D's records show that the last time the 10-largest projects announced more than 15,000 jobs in the South was in the fall of 2004 when the 10-largest deals amounted to 19,985 jobs. Go to "archives" on www.SB-D.com to research the top 10 deals in the South every quarter since 2000. 

Poll: Southerners Favor Federally Funded Programs to Create Jobs

The Winthrop Poll is a long-term survey initiative designed to keep public policy makers across the country in touch with the attitudes and opinions of citizens of the American South. Trained interviewers administer the polls at the telephone survey research lab on the campus of Winthrop University in Rock Hill, S.C. The 2009 survey included 866 random interviews of people 18 or older in several Southern states. This year's survey revealed some surprising and conflicting data, such as:

• 71.6 percent favor the federal government funding new programs to help create jobs
• 62.7 percent favor the federal government giving aid to states in serious financial trouble
• 28.1 percent favor giving aid to U.S. banks and other financial institutions
• 35.0 percent of Southerners polled said that the economic stimulus has made the economy better, 37.9 percent said it had no effect and 20.6 percent said it has made the economy worse
• 41.1 percent said they were not concerned about losing their jobs, 20.7 percent were not very concerned, 21.7 percent were concerned and only 16.2 percent were very concerned.
• As for who is to blame for the recent economic crisis, here are the figures from the "blame a great deal" category: Banks: 47.8 percent; Large business corporations: 46.8 percent; Consumer debt: 42.5 percent; The Bush administration: 39.1 percent; The Obama administration: 17.9 percent.

Almost a Clean Sweep for the South in Business Climate Rankings

Site Selection magazine recently published its annual state business climate rankings and this year eight of the 10 states with the best business climates are Southern states. North Carolina topped the magazine's list followed by Texas, Virginia, Tennessee, South Carolina, Alabama, Georgia and Kentucky. The only other U.S. states making the top 10 were Ohio and Indiana. The ranking was based on a survey of corporate real estate executives.

Milken Institute Publishes Best Performing Cities Ranking

Austin-Round Rock, Tex. topped the list of Best Performing Cities in the 2009 Milken-Greenstreet Real Estate Partners’ study. The study ranks U.S. metro areas by how well they are creating and sustaining jobs and economic growth. Following Austin at No. 2 was Killeen-Temple-Fort Hood, Tex. Also making the ranking’s top 10 in the South were McAllen-Edinburg-Mission, Tex.; Houston-Sugar Land-Baytown, Tex.; Durham, N.C.; Huntsville, Ala.; Lafayette, La.; and Raleigh-Cary, N.C.

The South Doesn’t Fare Well in Tax Climate Index

Florida was the only Southern state to rank in the top 10 of the Tax Foundation's 2010 State Business Tax Climate Index. Then again, only one Southern state made the ranking's bottom 10 and that was Maryland. South Dakota, Wyoming and Alaska were the top three in the most business friendly tax states category and New Jersey, New York and California brought up the bottom of the least business friendly tax states.

Texas Instruments Opens New Chip Plant after Five-Year Wait

After breaking ground on a 1.1-million-square-foot computer chip manufacturing plant in Richardson, Tex. in 2004, Texas Instruments finally opened the facility for business in the fall 2009 quarter. The building, which will eventually house 1,000 workers, sat empty for years while TI waited for the right time to launch the facility. The plant is the first chip manufacturing facility to open in the U.S. since 1996 and is the first globally to use 300-millimeter silicon wafers to produce analog chips.

Rural Broadband Funding Under the American Recovery and Reinvestment Act of 2009

One of the South’s largest and most difficult economic development projects is wiring the entire region’s rural areas with high-speed Internet service. Vast areas of the region still cannot access broadband service. With $7.2 billion in appropriated funding from the American Recovery and Reinvestment Act, efforts are underway to bring service to much if not all of the rural South. Currently, broadband mapping and planning is being done in several Southern states. Through information we have received from each Southern state’s economic development department, SB&D has drawn its own map of which rural areas in the region currently have broadband service (in blue).

MSN and Sperling Rank Most Livable Bargain Markets

Oklahoma City, Little Rock-North Little Rock, Columbia, S.C. and Houston-Sugar Land-Baytown, Tex., made the top 10 of a recent ranking published by MSN Real Estate. MSN Real Estate asked Bert Sperling of "Sperling's Best Places” to evaluate the most affordable housing markets from the 100-largest U.S. metro areas and pinpoint 10 of the most livable areas. Factored into the study were unemployment rates, commute times, entertainment and cultural amenities and housing affordability.

Forbes’ “Best Bang-for-the-Buck Cities"

In a similar study to MSN’s, Forbes recently published a ranking titled “America’s Best Bang-for-the-Buck Cities,” factoring in solid housing markets, stable employment, cost of living and commute times. Little Rock, Jackson, Miss., Augusta, Ga., Wichita, McAllen, Tex., and Chattanooga all made the ranking’s top 10.

Fortune Magazine Ranks Oklahoma City No. 1 for Small Business Startups

Fortune magazine and CNNMoney.com have recently ranked Oklahoma City No. 1 among large metro areas in the U.S. for small business startups. The publications describe Oklahoma City as "stable and affordable" boasting the second-lowest foreclosure rate among large U.S. metro areas. The city was also cited as being friendly to life-science industry startups and its high concentration of deep-pocketed local investors.

San Antonio Named Strongest Metro Economy by BusinessWeek

BusinessWeek named San Antonio, Tex. as the No. 1 metro economy in the U.S. in the fall quarter. Following San Antonio in the top 10 were eight other Southern markets including Austin-Round Rock, Oklahoma City, Little Rock-North Little Rock-Conway, Dallas-Fort Worth-Arlington, Baton Rouge, Tulsa, Houston-Sugar Land-Baytown and El Paso. Omaha, Neb. was the only U.S. market outside the South to make BusinessWeek's top 10 strongest metro economies. Jackson, Miss., McAllen-Edinburg-Mission, Tex., Washington-Arlington-Alexandria, Columbia, S.C. and Virginia Beach-Norfolk-Newport News were Southern markets ranked in the magazine's second 10.

Homegrown Success in Tampa Bay

A local Odessa, Fla. nanotech company that currently employs 18 workers plans to add 1,000 jobs over the next five years, thanks to a $200 million trade agreement with China. Dais Analytic got its start producing high-tech filter membranes to improve air quality and cut energy costs in homes and businesses. The company has expanded to develop products for desalination, wastewater treatment and energy storage. Recently, the company struck an agreement to sell its products to a subsidiary of the Chinese government.

Atlanta and Other Markets in the South Top All in Forbes Retirement Ranking

Atlanta, Dallas-Fort Worth, Tampa Bay, Houston, St. Louis and Austin were at the top of Forbes Magazine's list of "recession proof cities to retire in" that was published in the fall quarter. Kansas City and San Antonio made the top 10 in the ranking and 17 markets in the South made up the top 40 cited by Forbes. Criteria used for the ranking included current median home prices, five-year projected home prices, median monthly housing expenses, cost of living, median income for households over age 65, five year job growth outlook and sunny day statistics from the NOAA.

CNN: Kingsport, Tenn. Cited for Small Business Growth

In a report published on CNNMoney.com in the fall quarter, Kingsport, Tenn. was ranked as the No. 1 metro in the U.S. for small business growth between 2004 and 2007. Kingsport was followed by St. George, Utah, Provo, Utah, Bend, Ore. and Palm Coast, Fla. Making the ranking’s top 25 in the South were Gainesville, Ga., Ocala, Fla., Austin, Tex., Cape Coral, Fla., Myrtle Beach, S.C., McAllen, Tex., Wilmington, N.C. and Hinesville, Ga. In a related ranking, Oklahoma City was ranked the No. 1 large market to launch a small business by CNNMoney and Huntsville was ranked as the No. 1 midsize market.

Major Aerospace Development Announced in Mississippi

The formation of the master planned GTR Global Industrial Aerospace Park was unveiled in the fall quarter in Lowndes Co., Miss. Occupying 2,500 publicly-owned controlled acres, the site sits adjacent to the Golden Triangle Regional Airport and accesses existing infrastructure elements of power, gas, rail, air, highway and waterway transportation. The park, which could accommodate up to 8 million square feet of industrial space and thousands of jobs, will be developed under the combined efforts of the governments, economic and industrial entities and educational institutions located throughout Lowndes County and the seven surrounding counties in Mississippi and Alabama. Columbus and Lowndes County already have a growing aerospace cluster with American Eurocopter, Stark Aerospace and Aurora Flight Sciences having a combined investment of $80 million and an employment of 600 workers in the county.

Alabama, Florida, Louisiana and Mississippi form The Aerospace Alliance

In an effort to establish the region as a world class aerospace corridor and land the KC-45 fuel tanker project with the Air Force, Governors Bob Riley of Alabama, Bobby Jindal of Louisiana and Haley Barbour of Mississippi announced The Aerospace Alliance in late October at an event in Bay Minette, Ala. The 501(c) (6) private/public organization will promote the Gulf Coast and surrounding region as a center for aerospace and aviation, including the states of Alabama, Florida, Louisiana and Mississippi. At deadline, news on the tanker project was very fluid and by the time this issue is published there could be a decision on whether EADS and Northrop Grumman and/or Boeing will win the $40 billion deal. If Boeing is selected, Wichita, Kan. could get much of the work. However, if the KC-45 aerial tanker is selected by the Air Force, it will be built in Mobile, Ala., which is in the heart of the Aerospace Alliance region. The project is expected to bring an estimated 48,000 direct and indirect jobs to the country. NOTE: SB&D is publishing a bonus issue on the South’s aerospace industry in the spring quarter. Go to the e-card on the issue at www.sb-d.com/aerospace.

Light Travel Period for SB&D in the Fall Quarter

Due to time spent planning for the 2010 calendar year, the fall quarter was a light one for SB&D and its travels throughout the South. We only visited one place in the fall and that was the Upstate region of South Carolina.

As a guest of the Upstate Alliance and its President and CEO Hal Johnson, Mike Randle visited the metro Greenville area, including stops at Clemson University's Advanced Materials Research Lab and Advanced Materials Center in Anderson, S.C. There, Randle's host, Innovate Anderson President Michael Panasko, toured the facilities with Dr. Joe Kolis, the Executive Director for the Clemson University Research Foundation.

The Center, located in Anderson, S.C., serves as a high-tech business incubator, providing space for advanced materials-related start-up companies. It is also home to exceptional research labs and features one of the finest electron microscope facilities in the nation.

While Randle was in the Upstate he participated in the Driving Experience at the BMW Performance Center, which is located next to BMW's assembly plant in Greer, S.C. "What's cooler than driving a $100,000 BMW M5 at 100 miles-per-hour around several different race tracks? Especially when it's not yours," Randle said.

Topping off the visit to the Upstate was a stop at Euphoria 2009 in downtown Greenville. The event featured guest chefs from all over the country for a weekend of food, wine and music. "I was blown away by my trip to the Upstate. Downtown Greenville is one of the most delightful central business districts I've seen in a long time," Randle said.

We would like to thank Hal, Mike and Upstate Alliance staff members Eric Miller and Jennifer Noel for hosting SB&D's trip to the South Carolina's Upstate region.

Atlanta was Hot in 2009, but Glut of Office Space Remains

Atlanta was one of the hottest markets in the South in 2009 as Georgia’s capital snagged several large headquarter relocations, including NCR and First Data. Even with that kind of success, one of the South's seven mega-markets (2 million-plus population) is facing a glut of empty office space that could take as long as 10 years or more to fill. There is approximately 24 million square feet of empty office space in Atlanta. In a normal year in a normal economy, about 1.5 million square feet of space is absorbed in the Atlanta market. So even if the economy improves dramatically and without any new building activity, it would take more than 15 years to fill the empty office space available in Atlanta.

Forbes: Virginia No. 1 for Business

For the fourth consecutive year, Forbes.com has named Virginia as the "Best State for Business" overall. Forbes' methodology uses gross state product, quality of life, labor and regulatory environments, workforce, educational attainment and cost of doing business among other factors to determine its best states for business. Virginia was followed by Washington, Utah, Colorado, North Carolina, Georgia, North Dakota, Texas, Nebraska and Oregon rounded out the top 10 list.  In Forbes’ sub-rankings, Texas was named the top U.S. state for “Economic Climate” and Georgia was named the No. 1 “Regulatory Environment.”

Houston tops all Southern Metros in GMP

According to a new report from the U.S. Bureau of Economic Analysis, the Houston metro area had the largest gross metropolitan product in the South in 2008 with $403.2 billion. Houston is ranked fourth in the U.S. behind New York, Los Angeles and Chicago, which rank first, second and third for their output in 2008. Houston was followed by Washington, D.C. (5th), Dallas-Fort Worth (6th) and Atlanta (10th) in the South.

Brookings Cites Best Performing Metro Economies

Thirteen of the 20-strongest U.S. metro economies are in the South according to a ranking published recently by Brookings. Making the top 20 strongest economies in the South were Austin-Round Rock, Baton Rouge, Dallas-Forth Worth, El Paso, Houston, Little Rock, McAllen, Oklahoma City, San Antonio, Tulsa, Hampton Roads and Washington D.C.

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