For real-time news on business, politics and economic development in the South, go to www.RandleReport.com. For even more economic development news in the South, including all project announcements, go to www.SB-D.com. For more information on the automotive industry in the South, go to www.SouthernAutoCorridor.com. And for more information on rural development in the South, visit www.SmallTownSouth.com. EDITOR'S NOTE: On August 31, 2012, The Randle Report launched www.RandleSportsReport.com.
South's export surge a chart buster
U.S. exports doubled from 2000 to 2010. That's impressive, but in 2012 the U.S. is just getting started on an export surge never before seen in this country. As a share of the U.S. economy, exports are at their highest point in 50 years. And with reshoring continuing to build, exports will only climb for years to come. In fact, exports are rising so fast it's difficult to keep up with the numbers. In this year's quarter No. 2, U.S. exports topped $773 billion. The second quarter 2012 total represents more than half of all U.S. exports in 2011. So while it took 10 years to double exports in the U.S., now it is doubling up in just a year. Of the $773 billion exported by the U.S. in quarter No. 2, over $310 billion – 40 percent – came from Southern states, an all-time quarterly record.
SB&D launching Southern Economic Development Roundtable
Several times over the last 20 years SB&D has been asked to put together the finest minds in economic development in the South to meet once a year in a social setting to discuss the issues, find ways the South can compete better and formulate solutions to many of the challenges facing the region. With this notification, SB&D has decided it will be at the forefront of the organization's formation. The group will be called the Southern Economic Development Roundtable (SEDR). This non-profit organization will meet for the first time in 2013. For more information on SEDR, contact Mike Randle at 205-871-1220 or email him at email@example.com.
SB&D to commemorate 20th anniversary with special edition in December
The SB&D issue you are reading is Volume 19/No. 4. That means the next edition for our quarterly magazine represents 20 years in print. In December, SB&D will feature a 40-page timeline – giving each year a two-page spread – that will document every significant event, deal and more in economic development in the South from 1993-2012. At the bottom of each year will be 1/4 and 1/2 page ad positions. Be a part of it because the print version will be posted digitally on RandleReport.com everyday for a year beginning Jan. 1, 2013.
1.4 million job openings in the South
According to the Bureau of Labor Statistics, there were 1.41 million job openings in the South in August. The figure represents an increase of about 10,000 openings from July. There were also 691,000 layoffs and discharges in the region in August. Quit rates in the South are rising fast, a sign that the economy is improving as workers move on to better paying jobs. About 1.1 million people living in the South quit their jobs in August, or about 2 percent of the workforce. In comparison, quit rates in the Northeast are still low at around 1.1 percent. Nationally, the quit rate was 1.6 percent in August compared to about 2 percent prior to the recession.
Editorial: Is reshoring bringing Chinese investment to the South with it?
By Mike Randle
Ever since China joined the WTO in 2001, economic developers in the South have been waiting. They have been waiting on Chinese companies to invest in their town, county or state. It's been a long wait because not much has happened in terms of Chinese FDI in this country. It's not like we haven't tried, considering all of the trade trips – 18 grueling hours on a plane non-stop – officials have taken to China since WTO admission more than a decade ago. Funny thing, some hold the belief that Chinese investments are all over this country. I easily refute that statement with this statement: name a Chinese brand operating in the U.S. tick…tick…tick, you can't can you?
Well, there are a couple; there's Lenovo in North Carolina. That Chinese-owned computer maker that purchased IBM's computer unit did the unthinkable recently. Lenovo is bringing computer manufacturing and assembly to North Carolina for its U.S. buyers. What? A Chinese computer maker is making computers in the U.S.? Okay, so hell has frozen over while the earth is frying.
There is also China's Haier Group, a maker of home appliances that was founded in Qingdao in 1984. They have a nice plant in Kershaw County, S.C. Let's see, it's hard to think of anyone else, but I know there are a few more Chinese companies out there in the South. A few.
The point is this: the Japanese and the Germans are all over the South in every conceivable industry sector imaginable. If you look, Japanese and German investments in the region go miles deeper than just the automotive sector. And the Koreans are getting in on the action, too. They love the South – Samsung, Kia, Hyundai – but the Koreans are 30 years behind the Japanese and Germans in FDI in the South. That makes the Chinese 50 years behind our Japanese and German friends.
In 2005, Chinese companies invested less than $500 million in the South. That's severe chump change. Then again, why would China invest anywhere considering all of the hundreds of billions being invested in their country by U.S.-based companies each year over the last decade? But, guess what: FDI in China has dropped every month this year. That's what reshoring to the U.S. is doing to China right now. And guess what again: That trend is just starting and China knows it.
So, SB&D believes – like the tiny Lenovo deal – that China is following the money, which is coming back to the U.S., more specifically to the South and Mexico. Look for a spike – the first ever in this country – in investments made by Chinese companies over the next ten years in the South simply because a mega-shift has occurred. If, of course, the Chinese can learn the American business culture as the aforementioned countries have perfected.
The shift is this: it was a herd mentality to go to China to manufacture and export. It is now a herd mentality to go to the U.S. and Mexico to manufacture and export. And it looks like, finally, China is running with the herd.
New Orleans No. 1 in metro recovery
For the second consecutive quarter, New Orleans was named the No. 1 metro area in the U.S. in recovering from the recession by the Brookings Institute. New Orleans fared better than all of the 100 largest U.S. metros in the first and second quarters of this year in the Brookings MetroMonitor report, which measures economic factors such as unemployment, production and operating costs.
Nashville Medical Mart canceled
Back in 2010, it was promoted as one of the most important projects Nashville has ever seen. But it is not going to happen. Texas-based Dallas Market Center announced in October it will suspend development of the Nashville Medical Trade Center. The development intended to convert the existing Nashville Convention Center into a new medical mart, which would have become an eight-story center for distributors of medical products. The developer of the project said that it had struggled to find tenants.
First South Carolina-made 787s fly high
The first 787 built at Boeing's new plant located at the Charleston International Airport was delivered in September. Two others rolled off the assembly line prior to this issue's deadline.
Alabama.gov named best site
In September, The Center for Digital Government named Alabama.gov the best state government website in its 2012 Best of the Web competition. Alabama.gov also won the 2012 Best Government Site award from the Web Marketing Association.
Raleigh, N.C., No. 1 in Businessweek.com's book
Businessweek.com spent months working with data that would help it identify the best cities in the U.S. It looked at gobs of data, including quality of life issues such as great restaurants, schools, college life, greenspace and sports teams. Also included were cultural factors. What city was No. 1 in Businessweek.com's book? It was Raleigh, N.C. Sorry Boston, New York and San Francisco.
Former Wal-Mart in McAllen, Texas has new life
When the Wal-Mart moved to a larger location down the street, the city of McAllen scooped up the abandoned big-box building and spent $24 million transforming it into a 123,000-square-foot public library. The vibrant space includes a computer lab, a cafe, meeting rooms with videoconferencing capabilities and a 180-seat auditorium. It is a major upgrade from the city's old 40,000-square-foot main library, which had cramped shelves and limited seating.
The low-wage jobs explosion
Yes, the economy is adding jobs these days. . .but most of those positions pay pretty poorly. Some 58 percent of the jobs created during the recovery have been low-wage positions, according to a new report by the National Employment Law Project. Only 22 percent have been mid-wage jobs and 20 percent higher-wage positions. These low-wage jobs pay $13.83 an hour or less.
Loudoun County, Va., No. 1 for job growth
CNN Money reported in August that Loudoun County, Va., produced more job growth than any other jurisdiction in the country from 2000-2011, with 83 percent growth. About 9,500 businesses employing more than 137,000 people operate in Loudoun, including global players such as AOL, Raytheon, Verizon and Digital Realty. Many of the county's technology firms can be found in Ashburn, which Money ranked among the best places to live in the United States. Much of the world's Internet traffic passes through Ashburn, also known as "Data Center Alley," which has been the recipient of much of the growth in Loudoun.
Kentucky Gov. Steve Beshear announces expansion, rebranding of statewide innovation network
Kentucky's entrepreneurial community received a boost in August with the unveiling of an expanded and rebranded program designed to provide free business services to innovative start-up companies. Enhanced with a new name, logo, focus and expanded locations, the Kentucky Innovation Network was unveiled by Governor Steve Beshear in September at the Western Kentucky Innovation and Commercialization Center.
Cross-state pollution rule thrown out by Court of Appeals
In late August, the U.S. Court of Appeals threw out the cross-state air pollution ruling. The ruling brought relief to Texas regulators and coal-burning power plants in the state. The original ruling, part of the Clean Air Act, which centered on cross-state pollution, had some utilities in Texas planning on closing power plants in the state. Already, Texas is facing major stresses on its electrical grid. The cross-state air pollution rule, which was implemented last year, would have limited toxic emissions from power plants in 28 states.
Texas Gov. Rick Perry wins fDi Magazine's 2012 Governor's Award
Texas Gov. Rick Perry was awarded fDi Magazine's inaugural "Governor's Award" in August. The award is given to the governor most successful in attracting new investments to his state. The award was decided by a compilation of greenfield investment data from fDi Markets as well as a survey that asked state governors about their strategies for attracting new industry. fDi Magazine is a publication of The Financial Times, based in London.
White House investing in West Virginia manufacturing hub
The Robert C. Byrd Institute for Advanced Flexible Manufacturing got good news in August. It is one beneficiary of President Barack Obama's emphasis on advancing manufacturing in this country. The White House partnered with dozens of companies, universities and nonprofit organizations in Ohio, Pennsylvania and West Virginia to connect industry, education and federal agencies to foster manufacturing in those three states.
Southern states the most charitable in the U.S.
The Chronicle of Philanthropy published a story in the summer that showed that Southern states are the most charitable in the nation. Some of the least-charitable states, according to the study, include all states in New England, New Jersey, Wisconsin and Nevada. Mississippi, Alabama, Tennessee, South Carolina, Arkansas, Georgia, North Carolina and Oklahoma were states in the South that made the "most charitable" top 10, along with Idaho, Utah and Maryland.
A Southern legend: MoonPie updates itself
Made in Chattanooga, Tenn., since 1917, the iconic MoonPie has changed its logo and packaging for the first time in 20 years aiming for a 10 percent annual jump in revenue. "The new packaging is very reminiscent of our historical packaging," said Sam Campbell, the company's president and fourth generation head of the family-owned firm in an article in the Chattanooga Times Free Press in August. The new look retains a celestial theme while using cloud-like art to convey the fluffy texture of the cookie and marshmallow food product.
Louisiana economic developer Mike Eades featured in Bloomberg
Longtime Southern economic developer Mike Eades, president of the Ascension (La.) Economic Development Corp., was recently featured in a report by Bloomberg. The story focused on the "reindustrialization" of America in part because of the natural gas boom the country has seen just in the last half-decade or so. Eades was interviewed on the site of Nucor's new $750 million iron-processing facility the Charlotte-based steelmaker is building in Ascension Parish. "We're just seeing an incredible amount of activity," Eades said in the story. Eades' parish tallied over a billion dollars in industrial investment last year and he expects double that this year. Part of the story read, "A surge in U.S. natural gas development has spurred $226 billion in spending plans on pipelines, storage, processing facilities and power plants, most slated for the next five years. . ." The story also cited a recent Citigroup report that a "reindustrialization" of America could add as many as 3.6 million jobs by 2020 and increase the gross domestic product by as much as 3 percent.
Airbus gets first order for Mobile, Ala., full assembly aircraft plant
There are only three places in the U.S. where fully assembled large aircraft are made and rolled out. Puget Sound, Wash., where Boeing employs over 65,000 workers, is one of those places. The other two U.S. locations weren't on anyone's radar until just a few years ago. Charleston, S.C., is now delivering fully assembled 787 Dreamliners and in the summer quarter, EADS/Airbus announced it is building a plant that will fully assemble A320neos beginning a little more than three years from now. In August, the Alabama Web site al.com reported that Virgin America airlines will purchase 30 of the planes made in Mobile. Within a few weeks of the announcement, the France-based company got an order of 30 planes? Wow, looks like the third site where large aircraft will be assembled in the U.S. has gotten a pretty good start.
Tampa Bay region selected by Brookings for export exchange
Exports are driving the U.S. economy out of the doldrums and Tampa Bay is benefitting. Tampa Bay was selected by the Brookings Institution in September as part of the prestigious Metropolitan Export Exchange. The Exchange will help to create new strategies that increase the region's exports. Charleston, S.C., and Louisville-Lexington, Ky., were also selected by Brookings in the South.
Columbus, Miss., port booming
Things are shaking big-time at the Columbus-Lowndes County Port Authority, where local steelmaker Severstal – on almost a daily basis – is shipping 50 or more 30-ton steel coils on the Tenn-Tom Waterway to buyers worldwide. And with KiOR opening its biofuel facility later this year, the inland port is looking to grow as it checks out another 100 acres in a remote part of Lowndes County.
Arkansas exports up 36 percent, West Virginia's grow by 31 percent
A recent report by the International Trade Administration showed that Arkansas exports were up 36 percent in the first 6 months of 2012 compared to the same period last year. Arkansas' exports grew from $2.8 billion to $3.8 billion, a 36 percent increase. Coming in second in the South in exports increases, West Virginia saw a growth of 31 percent in the first six months of 2012.
U of Kentucky's Center for Applied Energy Research opens
The University of Kentucky's Center for Applied Energy Research opened a new lab in August that will support the combined use of high-tech batteries, biofuels and solar technology. The more-than-$20 million deal will assist the Kentucky-Argonne Battery Manufacturing R&D in product development in Lexington, Ky.
Atlanta Mayor Kasim Reed wants you to know about "Start Up Atlanta"
Invest Atlanta, one of the Atlanta region's numerous economic development agencies (it is hard to keep up with them) announced in the summer its new initiative, "Start Up Atlanta." The program is designed to boost entrepreneurship in one of the South's seven mega-markets (3 million or more MSA population). Mayor Kasim Reed, in an article published by the Atlanta Journal-Constitution, declared to a group of entrepreneurs, "You are going to have an open door to me, so that when you decide that you want to share your dream with us, bring your business to the city of Atlanta."
Texas tops 250,000 jobs
In the yearend July to July, Texas gained 258,500 private-sector jobs, by far the largest state job gain in the U.S. in that period. July also marked the 24th straight month of job gains in Texas. The 3 percent growth in private sector employment in Texas compared to 1.8 percent nationally.
Creative industry a big player in San Antonio
According to a recent study by the San Antonio Office of Cultural Affairs, the Alamo City's creative industry – publishing, design and advertising, artists and the performing arts – had a $4.6 billion economic impact in 2011. The industry employs about 30,000 people in San Antonio who earned wages of about $1.1 billion. The creative industry grew by about 36 percent in San Antonio in the last five years.
Florida tourism industry on record pace
In the second quarter, approximately 22.1 million people visited Florida, setting a pace of 45.5 million tourists for the first six months of the year. The record is 86 million visitors, which occurred in 2011. Tourism is obviously huge to Florida's economy – $80 billion annually – accounting for one in every seven jobs in the state.
Florida No. 2 for clean tech jobs
California dominated clean tech job creation in the second quarter of 2012 with about 21,000 new jobs announced. But Florida is coming on strong as it landed in second place when more than 7,000 clean energy jobs were announced in the state in the second quarter, according to a report published by the group Environmental Entrepreneurs.
Exurbs grew fastest from 2000 to 2010
Exurban areas, those places that connect the outer reaches of suburban sprawl and rural outposts, grew faster than any other populated areas covered by the U.S. Census Bureau. Between 2000 and 2010, the nation grew by about 10 percent to 309 million. Yet, in the exurbs, populations rose by over 60 percent from 2000 to 2010.
Tax revenue in Florida shows that state's economy is revving up
Florida's economy is showing signs of life as increased tax collections are easing some of the severe budget constraints seen in the state the last four years. The Florida legislature should have $2.6 billion more in revenue for the 2013-14 budget year, according to Florida's Revenue Estimating Conference. However, this year's estimated $24.9 billion in general revenue is still well below totals seen in Florida prior to the recession. The 2006-07 year saw $31.7 billion in general revenue.
Northwest Florida's Don Kirkman, Enterprise Florida's Gray Swoope featured on Today in America
Terry Bradshaw narrated a great video on Northwest Florida, and Florida's Great Northwest CEO Don Kirkman and Enterprise Florida CEO Gray Swoope were featured. The video featured many of the region's assets, including aerospace and defense, next-generation energy and, of course, the world-class beaches of the Florida Panhandle.
Editorial: Fear driving worker productivity in the South
By Mike Randle
One of the best things that has come out of the Great Recession is worker productivity in the U.S., specifically in the South. Some have said that today it takes eight Chinese workers to do the job of one worker in the American South. I am sure that can be measured in exact ways, but more inexact accounting can do the job just as well.
Near the end of my current presentation to groups, I ask how many in the audience are doing the jobs of two of their former coworkers who lost their jobs during the recession. Usually about 20 percent raise their hands. I then ask, "At first, you didn't think you could do it, did you? But now you are just used to it, right?" And then I add, "It's bullshit, I know. But you still have your jobs."
In the summer quarter, Michael Feroli, chief U.S. economist at JPMorgan, said in an article in Bloomberg BusinessWeek, "If you don't like it (your job), you're probably sticking around anyway, as evidenced by the tiny number of workers who are leaving their jobs voluntarily. Workers are still scared, and so probably could be induced to work harder or longer than usual out of fear of losing their jobs," Feroli said. Feroli asked the writer, who was doing the interview at 8:00 pm, if he was being paid after hours for the work. He wasn't.
I also mention in my current speech that technology is taking boots, pumps and loafers off the factory and office floors. Combine the fact that workers are putting in many more hours than they are getting paid for out of fear of losing their jobs, and you now have – unscientifically – a huge reason why unemployment is still almost double what it should be based on numbers we are seeing on the economic development front.
Duke plans three new nuclear power plants
The new power company created by the merger of Duke Energy and Progress Energy has plans for three new nuclear plants — two in the Carolinas and one in Florida. But Duke executives have said the Carolina plants — one near Gaffney and another near Raleigh — won't get built unless North Carolina lets it recover financing costs from ratepayers up front, as South Carolina permits. Charlotte-based Duke and Raleigh-based Progress recently jumped the last regulatory hurdle needed to merge and create the nation's largest regulated utility with more than seven million retail customers in six states.
Tennessee job growth increases, but wages decline
More of us are working, but we're making less. That's the mixed snapshot of Tennessee shown by recently released government data, which say the state — led by a pair of Middle Tennessee counties — was among the national leaders in job growth but also saw wages fall by more than most during a recent one-year period. Economists and local economic officials couldn't readily pinpoint the causes of the unusual contrast, offering several possible culprits. Among them: more part-time workers getting hired, flaws in how the data is collected or greater job losses in higher-paying industries.
German manufacturers find Forsyth County, Ga., a good fit
Forsyth County, which generally flies under the radar when compared with its larger neighbors such as Fulton and Gwinnett, has been successful at tapping into a rich vein of global growth — German companies looking to expand. "Five of our 10 largest international employers are German," said Randall Toussaint, vice president of economic development at the Cumming-Forsyth County Chamber of Commerce. A baker's dozen of German firms in the county includes four with a name that starts with Siemens, a global powerhouse in energy, manufacturing and health care.
Texas surpasses prerecession job levels, ranks No. 1 for job gains
Texas tops the list of nine states and the District of Columbia that have regained all the jobs they lost during the recession, a new analysis shows. Texas gained 410,400 net nonfarm jobs between May 2007 and May 2012, ranking the state No. 1 for raw change during that period, according to a Business Journals' On Numbers analysis of U.S. Bureau of Labor Statistics data. The comparison period begins seven months before the official start of the recession in December 2007, meaning Texas surpassed its prerecession job level by a significant margin.
Bardstown, Ky., a winner in Rand McNally/USA TODAY 'Best of the Road' 2012 Contest
Bardstown, Ky., the "Bourbon Capital of the World," has been chosen the "Most Beautiful" small town in America in the Rand McNally/ USA TODAY "Best of the Road" contest. This designation, announced July 17 in Seattle, Wash., was determined through a nationwide contest of 650 nominated towns, where judges were sent cross-country to visit each of the 30 finalists in five different categories, including Most Beautiful, Friendliest, Most Fun, Most Patriotic and the town that has the Best Food.
Feds to fast-track Savannah port project
The federal government announced that the dredging of the Port of Savannah is among seven nationally significant infrastructure projects that have been placed on a funding fast track, with all necessary federal reviews to be finished by November. President (as of this writing) Obama's latest jobs initiative — a pledge to accelerate expansion plans for five ports along the Eastern seaboard — is getting rave reviews from an unexpected corner: a handful of Republicans usually sharply critical of the president but who have also fought hard in recent years for federal dollars to help ready their ports for the flood of shipping and commerce expected by the Panama Canal's expansion.
Midland, Texas: Be careful what you wish for
Housing as expensive as New York City's has become the norm in Midland, Texas, amid an oil boom that is rapidly reshaping the area. With oil prices hovering above $80 a barrel, more than double their level of early 2009, workers have flocked to the Midland areas from elsewhere in Texas and the nation, lured by jobs working on rigs or driving trucks. The resulting housing shortages, traffic and strain on schools has some residents shaking their heads.
North Carolina Ports post first profit in 3 years
The North Carolina State Ports Authority turned a profit of almost $400,000 in the fiscal year that ended June 30th. That's the first profit for the ports in three years. (The StarNews of Wilmington reports the last time the ports had a profit was in 2008 when they made just over $1 million.) Ports Authority officials credit the increased profit to the increases in bulk cargo handled by the ports.