Winter 2010

Welcome to the World's Second-Largest Economy

Mike Randle, Editor

Whenever I speak to a group I always bring my standard statistics showing the South's rise in socio-economic standards over the last 50 years. I will usually present population figures from the 1950s that show the South growing from essentially the same population of the Midwest and the Northeast to a total today that surpasses the two regions combined. Typically, I will also present an argument that despite the perception that the South is an educational abyss, the region's residents actually have earned an 83 percent average high school graduation rate, compared to the U.S. rate of 84.5 percent. Furthermore, the South isn't far behind the U.S. average in residents with Bachelor's degrees or more. The U.S. average is 27.5 percent and the South's average is 25.5 percent.

But until now, I couldn't make the claim that the South is the world's second-largest economy. Using gross state product totals for calendar year 2008, the American South overtook Japan in total gross product making the region the second-largest economy in the world. SB&D's definition of the South includes 17 states from Texas in the west to Maryland in the east. The 2008 figures were recently released by the Bureau of Economy Analysis.

Total GDP 2008

Source: www.bea.gov

The South is poised to remain the world's second-largest economy for a few more years and maybe longer if the region's biggest contributor to its economy -- finance, insurance and real estate (FIRE) -- makes a strong comeback during the recovery. FIRE and manufacturing are far and away the South's biggest contributors to its economy.

But at some point in the near future experts say, China will transition from the world's fastest-growing economy to the world's second-largest economy. It should be noted that in 2008 the South produced a total gross product value that exceeded Japan's by a scant $4 billion and China's by a mere $22 billion. The South has followed Japan in third place for years. While the South out produced Japan for the first time, China is now poised to overtake Japan and the South in the next few years.

Regardless, for the South to rise to the world's second-largest economy for the first time in world economic history is cause for celebration. It is a huge testament to the region's popularity among the nation's private industry sectors that together account for almost 90 percent of U.S. GDP. We will proudly change our masthead to read "Corporate and Industrial Sites in the World's Second-Largest Economy" for now and hope that it stays that way for a while.

A Growing Player in the South's Economy

One part of the South's economy that is expanding rapidly is the aerospace sector. We are highlighting the aviation and aerospace industries in the South in a special bonus edition in May titled "The American South: The Center of the New Aerospace Universe." This issue will be the most comprehensive publication ever done on the region's aerospace industry. Every Southern state's largest aviation and aerospace employers will be identified as well as a database of sites in the region that fit particularly well for growing aerospace concerns. Also included will be feature articles on issues and companies surrounding the South's new-found success in aviation and aerospace.

If you would like a copy of this edition, go ahead and subscribe now so we can put you on the list. Go to www.sb-d.com to subscribe and go to www.sb-d.com/aerospace to view an e-card describing the special issue. If your business benefits from the aviation and aerospace industries, this bonus issue on opportunities for you in the South will is a must read.

Other Sources of Information if Your Company Wishes to Expand to the World's Second-Largest Economy

Finally, in addition to www.SB-D.com, Southern Business & Development and our aerospace bonus issue, you can get more valuable information on moving or expanding your company to the South by going to www.SouthernAutoCorridor.com (a must for those in the automotive industry), and www.SmallTownSouth.com, the only Web site profiling opportunities for your company in the Rural South.

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