Winter 2010

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

Job Growth "Mostly Nonexistent"

Atlanta-based Garner Economics recently released a report that showed that while most economists agree that the worst of the recession is over, total job growth among the nation's 377 metropolitan areas is still "mostly nonexistent." As of December 2009, only four metros in the country had experienced 5-6 months of year-over-year total job growth during the second half of the year. Another four metros had four months of job growth over the same period. In all, 349 metros (93%) had experienced no total job growth in the second half of 2009.

U.S Metros with Four Months or More of Job Growth

Metro Kennewick-Pasco-Richland, WA McAllen-Edinburg-Mission, TX Sandusky, OH Lynchburg, VA Cumberland, MD-WV Hot Springs, AR Morgantown, WV St. Joseph, MO-KS

Months 6 6 6 5 4 4 4 4

Cerner Announces 4,000 New Jobs in Kansas City, Kan.

Medical software developer Cerner Corp. announced in the winter it is building a 600,000-square-foot office complex in western Wyandotte County, Kan. The Kansas City metro town’s total Class A office space inventory currently stands at about 600,000 square feet. Cerner and developers of the complex, which will include a soccer stadium and other mixed-use developments, announced they will invest $400 million in the deal.

Mass Layoff Events Slowing

In the fourth quarter of 2008, there were exactly 800 mass layoffs in the South. That number dropped to 425 in the fourth quarter of 2009. Mass layoff events are from establishments which have at least 50 initial claims for unemployment insurance filed against them during a five-week period.

Facebook to Create 200 Jobs in Austin

Social network Facebook announced in March it is setting up a sales and operations office in Austin, Tex. The $3.1 million project will create about 200 new jobs. The office represents the first major U.S. expansion outside of Palo Alto, Calif., where the company is headquartered.

Editorial

It's a Good Sign When the Financial Services Sector Starts to Hire

No industry has been punished more so than financial services in the South during this recession. The fine folks in North Carolina and Florida know that all too well, as do states throughout the region. Georgia and Florida are where more small banks have been snuffed out in the South. And let's not forget Alabama, where in Birmingham four of the nation's largest banks were headquartered there. That is just a memory now.

The media continues to focus on manufacturing as the industry sector that lost its legs in this recession. That may be the case nationally, but in the South manufacturing has been one of the few bright spots with large producers like Boeing, Hemlock Semiconductor, Volkswagen, Caterpillar and many others investing hundreds of millions of dollars in new plants in the region in 2008 and 2009.

In contrast, financials, which, with real estate and insurance (FIRE) make up the largest contributors to the South's gross regional product (second is manufacturing), have been a no show in job creation for almost three years now. Huge players that have created tens of thousands of jobs in the region over the last decade like Citigroup, Bank of America, Wachovia (Wells Fargo), Fidelity, Capital One, Washington Mutual (WAMU is no more), and Countrywide (ditto), haven't announced a large job generating project (500 jobs or more) in the South since 2006. Not one. That's a long time.

But if you turn to page 64 in this edition, you will see that financials are screaming back. Four of the South's ten largest job deals in the winter quarter came from the financial services sector. The last time that happened, Barack Obama was pretty much unknown to America and Nick Saban was coaching in the NFL. 

It's a good sign that financials are active on our job board because when banks make money, they are hiring machines in the South. Furthermore, for banks to make money, their larger clients must be making money, too. It's a good sign.

Which brings us to this: maybe one of the most important indicators from here on out regarding how fast the South recovers from this awful recession can simply be measured by how many jobs Citicorp, Capital One, Bank of America, Wells Fargo, Fidelity and other financials ring up this year and next. Also, watch USSA's activity in San Antonio. USSA seems to know the answer since they were the only financial services firm to add a significant number of jobs during this recession.

mike@sb-d.com

Winter Quarter's Performance not so Hot

After a resurgent 2009 fourth quarter, total deals slowed in the South in the winter 2010 quarter (December 22-March 22). In the fall quarter, the top 10 projects in the South combined to create an announced total of 15,000 new jobs, the largest total since fall of 2004. But in the winter quarter, total jobs created by the 10-largest projects dropped to 6,743, the second-lowest total since the recession began in the fall of 2007.

Total Jobs Generated in the South by the 10-Largest Job Announcements

Quarter Winter 2010 Fall 2009 Summer 2009 Spring 2009 Winter 2009 Fall 2008 Summer 2008 Spring 2008 Winter 2008 Fall 2007

Total Jobs 6,743 15,250 7,574 9,850 7,700 5,331 13,213 9,111 7,750 9,198

Source: SB&D

Alliance Global Logistics Hub Ranks as Top Foreign Trade Zone

For the third consecutive year, Alliance Foreign Trade Zone No. 196 ranks as the top General Purpose Foreign-Trade Zone in the U.S. in terms of foreign goods admitted. The Alliance FTZ admitted $5.35 billion in foreign goods in 2009.

Top Five U.S. General Purpose FTZs

1. Fort Worth/Alliance (Tex.) 2. Newark (N.J.) 3. Harris County (Tex.) 4. Port Hueneme (Calif.) 5. El Paso (Tex.)

$5.35 Billion $4.06 Billion $3.77 Billion $3.06 Billion $1.20 Billion

Florida's Cecil Field Awarded Space Vehicle License

Cecil Field, located in Jacksonville, Fla., was recently awarded a federal license to operate as a commercial spaceport. The Jacksonville Aviation Authority secured the license, which will enable Cecil Field's 12,500-foot long runway to be used by a variety of commercial space operators including Virgin Galactic. Cecil became the country's eighth licensed commercial spaceport and the first in Florida to launch and land space vehicles that operate horizontally like airplanes.

Migration to the South Slows: Texas Big Winner, Florida Big Loser

The last state population figures published by the Census Bureau before the 2010 census count becomes available showed that migration flows to high-growth Southern states such as North Carolina, Florida and Georgia have slowed significantly since the recession began in late 2007. While two of those states continue to see growth in population, Florida, for the first time in decades, saw more people move out than move in over the last year. The Sunshine State joined Nevada and California, formerly three of the largest in-migration states in the U.S., as states that have lost population recently. Texas, on the other hand, saw nearly 500,000 new residents in 2009 alone, by far the largest growth total of any other Southern state. Other figures published recently by the Census Bureau showed that from 2000 to 2009 the South had a population growth rate of 13.1 while the Midwest's and Northeast's was 3.8 percent and 3.2 percent respectively. The West grew by 13.2 percent in the last decade. Finally, according to Atlas Van Lines' 2009 migration trends report, Washington, D.C. (Maryland, W. Va., and Northern Virginia) had the highest percentage of inbound population traffic and Connecticut and New Jersey were the two largest outbound states in 2009.

SB&D's Travels in the Winter Quarter Top Half-Million Mile Mark since 1992

In road travel alone, SB&D topped the half-million mile mark in the winter 2010 quarter with a visit to eastern North Carolina. SB&D visited the North Carolina Department of Commerce in Raleigh, Lillington-Harnett County, Fayetteville-Cumberland County, Jacksonville-Onslow County, New Bern-Craven County and economic developers in Kinston, N.C. among others.

Economic development in eastern and southeastern North Carolina is supported by a large military presence and the related aerospace industry as it is home to Fort Bragg, Camp Lejeune and the base at Cherry Point. SB&D’s publisher Mike Randle was a guest speaker at a meeting of the members of North Carolina's Southeast, the regional economic development organization based in Elizabethtown, N.C.

Also in the winter quarter, SB&D was invited by Louisiana Economic Development to attend the Sugar Bowl in the Governor's box at the Superdome. A great time was had by all and a better time bestowed New Orleans a few weeks later when the Saints won the Super Bowl. We would like to thank North Carolina's Southeast and all of the organizations in southeast and eastern North Carolina as well as Louisiana Economic Development for hosting SB&D in the winter quarter. 

Southwest Airlines Waves Market Size Rule by Serving New Northwest Florida Airport

One of the South's mid-markets' most sought after economic development coups is to land Southwest Airlines at its airports. Shreveport and Baton Rouge in Louisiana, Columbia, S.C., Huntsville, Ala., and Knoxville, Tenn. are just a few of the South's mid-markets that do not have the necessary 1,000,000 in metro population that is generally required by Southwest to serve a market. But in the winter quarter, Southwest announced it will operate eight daily flights from the new Northwest Florida Beaches International Airport when it opens in May in Panama City, Fla. Metro Panama City's population is less than 200,000. However, the area is a popular tourist destination and the new airport is expected to draw customers from Pensacola to Tallahassee in Northwest Florida.

Southern Towns Named Finalists for American Main Street Award

Columbus, Miss., Fairmont, W.Va., Fort Pierce, Fla. and Lee's Summit, Mo. are four of only 10 Main Street communities in the nation that have been selected as semifinalists for the 2010 Great American Main Street Award. Columbus is one of the original Main Street programs in Mississippi and leads the state in downtown upper-floor housing. Columbus and the other 10 semifinalist communities have helped create more than 1,100 new businesses and nearly 4,800 new jobs, rehabbed more than 950 buildings and decreased their vacancy rates by an average of 31 percent. A national jury composed of former award winners, community development professionals, representatives from government and others involved in historic preservation will evaluate the semifinalists and select five winners on May 4, 2010 during the National Main Streets Conference in Oklahoma City.

Northrop Grumman to Relocate Headquarters to D.C. Area

Defense contractor Northrop Grumman announced in the winter quarter it plans to relocate its corporate headquarters from Los Angeles to the D.C. area by 2011. Northrop Grumman officials are scouting locations in D.C., Maryland and Northern Virginia for the headquarters operation. Northrop designs and manufactures ships, planes, tanks and other equipment for the military. The Pentagon, located in Alexandria, Va., is the company's biggest customer. About 300 workers are expected to relocate from California in the move.

U.S. and Mexican Automotive Associations Join Forces to Educate Supply Base

The Automotive Industry Action Group (AIAG) and Industria Nacional de Autopartes (INA), the automotive parts manufacturers association in Mexico, announced in the winter quarter a new collaborative partnership. The joint venture brings AIAG together with INA to ensure that automotive parts suppliers in the U.S. and Mexico are equipped with the same world-class educational programs, industry best practices and standards. Members of both organizations will benefit from shared information and resources bringing together the best automotive manufacturing possible. AIAG and INA have agreed to pursue areas of collaboration where appropriate, share information on initiatives and projects of common interest in an effort to better organize the U.S. and Mexico supply chain.

Hummer Deal Falls Through for GM; Shreveport Plant's Future in Doubt

When GM filed for bankruptcy in June of 2009, the company's Shreveport, La. plant was one of nine North American plants slated for closure by the Detroit automaker. GM pegged June of 2012 as the date for permanent closure of its assembly and stamping operations in Shreveport. GM has assembled the Hummer brand and Chevrolet and GMC pickup trucks at the plant for years. But there was hope that a deal to sell Hummer to China's Sichuan Tengzhong Heavy Industrial Machinery Co. could keep the plant open past 2012. That deal fell through in the winter quarter when Tengzhong couldn't get clearance from Chinese regulators within the time frame allotted for the acquisition. In response, GM decided to close the Hummer brand in late February. Louisiana officials are working with Motors Liquidation Company, which owns the Shreveport facility, to find alternative uses for the plant, which has undergone $1.5 billion in improvements in the last five years and at one time housed over 3,000 employees. The closure of the Shreveport plant means that since 2008, five major assembly facilities will have closed or announced closure in the Southern Automotive Corridor. Ten years ago, the South was home to 23 major automotive assembly plants. If the Shreveport plant closes in 2012, that total will drop to 17 after adding Volkswagen's new plant, which is scheduled to open in 2011. For more information on the South’s automotive industry, go to www.SouthernAutoCorridor.com.

SC Lawmakers Approve $270M in Boeing Bonds

The $270 million in bond money to help build the new Boeing airliner assembly line in North Charleston was approved by South Carolina lawmakers in the winter. The approval came on the first day of a 2010 legislative session that was dealing with a $563 million budget gap for the Palmetto State. The $270 million represents the most the state has ever borrowed for an industrial project.

Louisiana Experiences Third Consecutive Year of Population In-Migration

The U.S. Census Bureau recently released population figures indicating that Louisiana experienced its third consecutive year of more people moving into the state than moving out. Prior to this three-year run, Louisiana had gone more than two decades without seeing a single year of net population in-migration. From July 2008 to July 2009, 18,100 more people moved into Louisiana than moved out. The Census count showed that the state's population increased by 40,600 from July 2008 to July 2009.

TVA Assists in $4.2 Billion in Investment, 26,000 New Jobs in 2009

According to the Tennessee Valley Authority (TVA), the nation's largest public power utility assisted in creating 26,000 jobs and $4.2 billion in capital investments in the Tennessee Valley in 2009. TVA provides power to large industries and 157 power distributors that serve approximately nine million customers in seven Southern states.

Broadband Awards for Southern States

In the winter quarter, Rural Telephone Service Co. and its wholly-owned subsidiary, Nex-Tech, was awarded more than $101 million in Recovery Act funding for broadband Internet infrastructure improvements in central and western Kansas. The funds will be used to enable the development of broadband services in a 4,600 square-mile region of Kansas that's 99.5 percent unserved or underserved. Also, a new fiber network is set for North Georgia and North Florida. A 260-mile high-speed, $41 million Internet network that is being funded primarily by the federal stimulus program will link Atlanta and North Georgia with North Carolina. The project, announced in December, will reach 42,000 households and almost 10,000 businesses and connect 245 schools, universities, hospitals and government facilities in the region. About 1,000 jobs will be created during the construction of the new network. Lastly, a 14-county region in rural North Florida has been awarded $30 million by the federal stimulus to enable and enhance real access to broadband and high-speed connectivity. 

Rural Georgia County Hit Hardest by Recession

Tiny Jenkins County, Ga. (8,500 population) saw its total compensation of wages and benefits drop by 23 percent in the last year, the largest drop of any county in the U.S. according to the U.S. Bureau of Economic Analysis. Jenkins County is located between Augusta and Savannah in southeast Georgia. The unemployment rate in Jenkins was 21.3 percent in January. The county has lost virtually all of its 1,700 manufacturing jobs, with the big blow coming when a window manufacturer closed recently, eliminating 600 jobs.

Lockheed Martin's Georgia Plant Still Humming with Jobs

Despite winding down F-22 production at its Atlanta area plant, Lockheed Martin executives maintain that there might not be any lost jobs at the facility after all. Work on the C-5 and C-130J cargo planes continues at a fast pace at the facility and assembly of the F-35 Joint Strike Fighter could mean 500 new jobs at the sprawling plant located just outside of Atlanta. The facility houses about 7,300 workers.

Memphis Ranked No. 1 in "Real Estate Steals"

U.S. News & World Report recently ranked Memphis as the No. 1 U.S. metro for "real estate steals." The magazine partnered with Moody's Economy.com to evaluate the nation's 384 metro areas and studied average and quarterly price-to-income data to come up with a list of the top 10 cities for great deals on home buying. Other markets in the South making the top 10 included Washington, D.C. (4th), Mobile, Ala. (5th), Fayetteville, N.C. (7th) and Fort Worth (9th).

Raleigh Named Most Wired

In the late winter quarter, Forbes magazine named Raleigh, N.C. the most wired city based on broadband penetration, broadband access and the prevalence of Wi-Fi hot spots. Atlanta placed second followed by Seattle, San Francisco and Washington, D.C. 

Florida in Line for $1.25B for High-Speed Rail Project

President Barack Obama visited Tampa in the winter quarter to announce that the Sunshine State will be the recipient of $1.25 billion from the federal government to build a high-speed rail project from Tampa to Orlando. The amount is about half of what is needed to complete the 84-mile stretch in the I-4 corridor, home to over eight million people. Florida officials are hoping to add to the Tampa-Orlando rail line with one from Orlando to Miami.

Deals at Deadline

Pierre Foods announced it is creating 500 jobs and investing $16.8 million in its Catawba County, N.C. facility. DuPont announced in mid-March that it will build a $55 million soybean seed production facility in New Madrid County, Mo. Nokia Siemens Networks announced it is relocating a Florida technology center to its North American headquarters in Irving, Tex. The deal is expected to create 150 new jobs. Of the 300 people employed at Nokia's Boca Raton, Fla., facility, about 100 have been offered jobs in Irving. Southwest Power Pool, which oversees an electrical power grid in eight states, announced it is building a new operations center in Little Rock. The $62 million deal will create 150 new jobs. Bremner Food Group is investing $62.1 million to expand its plant in Princeton, Ky. The deal will create 111 new jobs. Kraft is investing $40 million in Frederick Co., Va. to increase production of its Capri Sun beverage product. Over 100 jobs will be created. Hyundai supplier SaeHaeSung is adding 150 new jobs in Andalusia, Ala. Modine Manufacturing is adding 200 jobs at its plant in Lawrenceburg, Tenn. The Wisconsin-based company is an auto parts supplier. Moulton Logistics announced in mid-March a new distribution facility in Berkley County, S.C. The $25 million center is expected to house 500 workers.

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