2004 SB&D Job 100

A Cause for Celebration!

Total Jobs Created by the 2004 SB&D 100 Stops Six-Year Slide

By Mike Randle

The year was 1997 and the data came from calendar year 1996. The 1997 SB&D Job 100, or the 100-largest job-making announcements from the previous year, created an astounding 136,442 jobs. That's an average of 1,364 jobs per deal. That year marked the fifth consecutive year the Job 100 increased its job creation total.

But the following year -- the 1998 SB&D Job 100 -- saw a decrease in jobs generated. It was the first decline since the ranking was first published in 1993. That 1998 crop of big deals created a total of 125,226 jobs. The next year it would drop again. We saw another decline in 2000 and another in 2001. In 2002 (2001 data), the Job 100 dipped below the 100,000 mark for the first time with only 82,826 jobs created. With such a paltry total we thought the bottom had been reached. We were wrong.

Last year's SB&D 100, based on calendar year 2002 data, is one we would like to forget and certainly one that economic developers in the South would like to forget. As for your company, 2002 was most likely a forgettable year as well.

The 2003 SB&D Job 100, which represents the top 100 job-making announcements made by many of the world's most well known companies, was the weakest in the 12-year history of the SB&D 100. In short, it stunk. Only 68,651 jobs were created by the top 100 job deals, about half that created by the Job 100 just six years earlier.

Yes, last year's Job 100 set record lows in total jobs created and saw the lowest threshold of any SB&D 100, including the 1993 and 1994 rankings, which, we will admit, were incomplete since Southern Business & Development was a new publication on the economic development scene. Although incomplete, the first two years of the SB&D Job 100 ranking beat the 2003 job creation total.

As we wrote in last year's SB&D Job 100 section, one of the best ways to use our annual ranking in an effort to judge the performance of the South's economy is to look at the threshold created by the ranking each year. The 100th-largest job-generating deal announced in the South in any given year sets the threshold.

In the early to mid-1990s, that 100th deal generated on average about 475 jobs. That figure was matched or increased every year to a record high of 600 jobs in 2001 (2000 data). Yet, in 2002 (2001 data), the threshold dropped for the first time from 600 jobs to 483. Then last year saw it drop to a record low of 320 jobs, meaning the South's premiere job-generating deals were dropping and dropping fast to a level that was almost half of the record threshold set just two years earlier. And if they were dropping that fast in the South, you can bet the house they were dropping faster in other U.S. regions.

The Slide Ends!

But bad news and even job-generating slides always come to an end some time. That time is now. Companies announcing large job-generating deals in the South propelled (if you want to call it that) the 2004 SB&D Job 100's threshold to 400 jobs, up from 320 last year. While it's great that the Job 100 has ended its two-year threshold dive, it should be noted that this year's 100th-deal mark is the second-worst in Job 100 history.

In essence, the 2004 SB&D Job 100 indicates that one of the longest job-generating dry spells in the South has come to an end. This year's list of the biggest deals in the South also clearly indicates that we're a long way off from the really good times of the mid-to-late 1990s, when major corporate job deals were announced every time the wind blew. Regardless, moving up is a lot more refreshing that moving down.

An Even More Important Slide Has Ended

Total jobs created by this year's SB&D Job 100 totaled 75,418 jobs. That's a respectable, yet unspectacular jump from last year's clunker of an all-time low of 68,651 jobs. Regardless of the increase, this year's total is also the second-worst Job 100 since the ranking was established 12 years ago. If anything, the rebound indicates just how far the South and the rest of the country, for that matter, fell in the early 2000s in large job generating deals. But hey, we're not complaining. At least the ever-downward skid is over.

Chart No. 1

Total Jobs Created by SB&D Job 100 1997-2004

The Makeup of the 2004 Job 100

Not only is it refreshing to see the arrow pointing up for the first time in several years, it's especially refreshing to see what types of deals made this year's SB&D Job 100. The automotive industry, which has ruled the South's economy for several years now, landed some impressive deals this year, led by Toyota's new assembly plant being built in San Antonio (2,000 jobs) and another Nissan expansion in Tennessee (1,500 jobs). The automotive industry put 11 big deals on this year's Job 100, about the same as last year's 12 deals.

It is also refreshing to see the semiconductor industry place three deals on this year's list. Texas Instruments announced in 2003 that it would build the first new semiconductor plant in the South in almost eight years. TI's new plant is being built in Dallas and it will employ 1,000 workers initially.

The surprising category represented very well on this year's Job 100 is headquarter operations. Our cover story in the Fall 2003 edition centered on the fact that more large corporations were relocating their headquarters to the South than ever before. Some of those that announced they were leaving places such as New York, California and Illinois to Southern climes like Richmond, Jacksonville and Atlanta included Philip Morris, Fidelity National and Newell Rubbermaid. There were a slew of others. In fact, 12 headquarter relocations or expansions made this year's Job 100. Prior to that the record was five headquarters posted on our ranking. Why are so many HQs relocating to the South? We're not quite sure, but you can bet security, operating costs and quality of life were factors in the relocation discussions.

Another industry sector that performed better than normal was aerospace and aviation. While only three deals made the Job 100, 16 smaller ones made it onto our "just missed deal" list. Just missed deals are those that create 200 jobs up to the Job 100 threshold. So this year, just missed deals were those with 200 jobs to 399 jobs.

The three other industry sectors that showed well on this year's Job 100 list include the typical suspects: Call centers, financial services and distribution/warehousing. Those three industry sectors, even in the tough years of 2001-2003, have proven to be stable big job makers in the South. After all, one thing hasn't slowed in the South and that's the migration of individuals and families into the region. With almost 109 million people, well over double the total living in the Northeast, the services sector will continue to grow in the South faster than any region of the U.S.

Industry Sector Winners

Call centers once again led all other industry sectors or sub sectors with 19 deals making the Job 100 and 19 making the just missed deal list, for a total of 38. Coming in second was the automotive industry with 11 Job 100 deals and 22 just missed deals. Tied for third place were financial services and distribution, posting 23 big job deals each. And right behind those two regular performers was the headquarter category with 22 large employment announcements. Aerospace and aviation also had a banner year with 19 big deals.

Also performing well in 2003 were wood products, info tech, biotech, ship and boat building, pharmaceuticals and computer products. Performing poorly again in job generation were old-line Southern industries such as agribusiness, oil, gas, chemicals and metals. New-line industries also performing poorly were telecommunications, gaming and health care. Surprisingly, textiles and apparel posted its best year since the early 1990s.

Manufacturing vs. Non-Manufacturing

By reading many current business publications or watching Lou Dobbs on CNN every night, you'd think manufacturing in the U.S. has gone the way of the buffalo, Pokeman cards and AOL. After all, there were only 31 manufacturing deals making this year's Job 100 compared to 72 service deals. But that's not an abnormally low total of manufacturing deals making the Job 100. On a per deal basis, the services sector usually creates more jobs than manufacturing. That's especially true with many call center and financial services job-making announcements. You have to go all the way back to the 1996 SB&D Job 100 to find a year when manufacturing deals outnumbered service deals.

But wait. This year's Job 100 represents only those deals with 400 announced jobs or more. If you go below the Job 100 threshold and look at all deals announced in 2003 with 200 or more jobs, you would find that in the South manufacturing is far from dead. Of the 305 corporate and industrial announcements made in the South last year that project the creation of 200 or more jobs, 145 are of the manufacturing variety. Of those 145, leading the way is the automotive industry.

The 145 manufacturing deals represent 48 percent of all deals announced in the South with 200 jobs or more. In short, manufacturing remains and we believe always will be a major job generating force in the South regardless of what you read or hear from economists and the media. Sure, there are some manufacturing sectors that are dead, such as those of the low-wage variety. But high-wage manufacturing, if anything, is on the upswing in the South. The fact that 48 percent of all deals of 200 jobs or more announced in the South in 2003 came from the manufacturing sector proves it.

Chart No. 2

SB&D Job 100 Manufacturing vs. Nonmanufacturing

Editor's note: Many years find a tie at the 100th deal; therefore some Job 100s include more than 100 deals.

The SB&D Job 100: The States

In the early years of the Job 100, Texas, Florida, North Carolina and Georgia were dominating job generating states. Virginia made its move in the mid-1990s, as did Tennessee later on in the decade to join those four top-shelf state economies. No other Southern states challenged those six states in big job deals from 1993 to 2000. But things changed dramatically beginning in 2001.

Just after the turn of the new millennium, smaller Southern states like Alabama, Mississippi, Kentucky and South Carolina saw their Job 100 deals increase, while larger states such as Texas, Georgia and North Carolina saw their big job deals decrease. As an extreme example, Texas' Job 100 deals fell from an average of 38 per year from 1995 to 2000 to a mere 10 Job 100 deals last year.

Today, Alabama, Mississippi, South Carolina and Kentucky can be compared more favorably with Georgia, Tennessee and North Carolina in big job deals. In terms of deals per capita, the South's smaller states are dominating the South's larger states, such as Texas, Florida, Georgia and North Carolina.

The adjoining chart No. 3 shows each Southern state's 12-year average performance of deals turned with 200 announced jobs or more compared to this year's SB&D Job 100. As you can see, of the South's nine small states (under 5 million in population), five met or exceeded their 12-year average in turning job deals of 200 workers or more. On the other hand, not one of the South's eight large states (over 5 million in population) reached their 12-year average of deals with 200 jobs or more.

Chart No. 3

2004 SB&D Job 100 State Performance

(deals 200+ jobs vs. 12-year average)

Eight States Increase Big Job Deals

Unlike last year, when only five states improved their big job deal performances from the year before, this year almost half of the South's states did better. This year's Job 100 shows that Alabama, Florida, Georgia, Kentucky, Louisiana, Maryland, North Carolina and Texas all improved upon their 2003 SB&D Job 100 performances.

Some notables include Alabama, which ranked fifth among all Southern states with 27 deals turned with 200 jobs or more. The fifth overall finish easily catapulted Alabama to the No. 1 slot in per capita performance. Georgia saw its big job deals more than double from 10 deals with 200 jobs or more last year to 24 this year. And Texas, which experienced a severe meltdown in big job deals in 2003 with 28, increased its total to 55 this year (see Chart No. 4 for other state performances in the SB&D Job 100 in 2002, 2003 and 2004).

Chart No. 4

The Recession Years: SB&D Job 100 State Performance

(deals 200+ jobs 2002, 2003 and 2004)