The 2002 SB&D Job 100

Recession Drops SB&D Job 100 Threshold to Lowest Level Since 1995

By Lee Burlett

Born-and-raised Southerners are proud people. They stick their chests out when times are good and crow like no other folk. Although they can be stubborn, they are also extremely forgiving. So let's forgive economic developers in the South for a job generation showing in calendar year 2001 that is the worst in eight years.

Yeh, 2001 was a stinker. Following two years of record 600-job thresholds in 2001 and 2000, the 2002 SB&D Job 100 could only muster a threshold of 478 jobs. That's the lowest threshold since 1995, when the 100th-largest job announcement made in the South created 450 jobs.

No indicator is more proof that the South's economy dropped significantly in 2001 than the total number of jobs created by the 2002 SB&D Job 100. This year's 100-largest corporate and industrial job deals created 82,826 jobs. Last year's Job 100 created 111,758 jobs. Interestingly enough, last year's total of 111,758 jobs was the fourth consecutive year of diminishing totals. The 2000 Job 100 created 113,136 jobs and 1999's list created 116,721 jobs. The last time the Job 100 beat out the previous year in total jobs created was in 1998, when 125,226 jobs were created by the South's 100-largest corporate and industrial announcements.

The sunken total of jobs represented by this year's Job 100 doesn't mean the South lost jobs on a net basis in calendar year 2001. Last year saw 1,102,000 new net jobs created in the region, compared to 659,000 in the West, 396,000 in the Midwest and 338,000 in the Northeast. So the American South remains the clear regional winner, as it has been for years, in net job creation.

But last year saw the South lose approximately 300,000 manufacturing jobs on a net basis. That means jobs created in the services sector dominated new job creation in the South in 2001.

Megadeals Few and Far Between

We describe megadeals as those that create 2,000 jobs or more. This year's list included two megas: WorldCom (3,600 jobs - Fairfax County, Va.) and Citicorp Credit Services (2,100 jobs - Florence, Ky.). The 2001 Job 100 featured eight megadeals, while the 2000 and 1999 lists featured 12 each. You have to go all the way back to 1993 to find a comparable year in megadeals in the South. That year saw three megadeals make the Job 100. So in terms of giant deals, the 2002 Job 100 is the worst in SB&D Job 100 history.

The showing of deals 1,000 employees or more with this group of big announcements is not as bad as the meager total of jobs created. There were 34 deals announced in the South last year with 1,000 jobs or more. That's 10 1,000 employee deals less than last year and 14 less than 2000's Job 100. Regardless, the 34 1,000 employee deals is certainly not a total bust sum. The SB&D Job 100 that holds the record for deals with 1,000 or more employees is 1998 when 49 deals with 1,000 jobs or more made the list. However, in 1995, only 30 deals with 1,000 or more employees announced made that year's "100," so this year's 34 deals doesn't add to the records of futility that are found with this group.

New vs. Expanded

The 2002 SB&D Job 100 has 43 new projects and 57 expansions. Surprisingly, that's similar to the ratio found in the last several years of the Job 100. You'd think with the tough economic times that 2001 brought, there would be many more expansions than new projects. The 2001 Job 100 had 40 new projects and 60 expansions and the 2000 Job 100 featured 44 new projects and 56 expansion deals. Prior to 1998, new projects surpassed expanded every year except in 1994.

Industry Trends

As mentioned, the services sector dominated the largest new and expanded job deals announced in calendar year 2001. Sixty-six percent of this year's Job 100 came from the services sector. Manufacturing came in second with 19 percent followed by the FIRE sector with 10 percent.

The industry sector makeup of the Job 100 has evolved dramatically since first published in 1993. Back then, over 50 percent of the Job 100 came from the manufacturing sector. Of course in 1993, apparel and textile manufacturers were well represented in the "100" as were poultry plants and general, odd-lot manufacturers. In fact, in 1994, 31 general manufacturers (not including automotive, aerospace, textiles, apparel and electronics) made that year's Job 100. Some of the products manufactured by those companies included appliances, tools, ceramic tile, plumbing equipment, air conditioning units, faucets, pool products and vinyl doors.

Today, those kinds of manufacturers seem to have gone the way of the buffalo, Enron and Southern stereotyping. It's almost as if they don't exist in the South anymore. At least they don't exist on the list of the largest jobmakers over the last several years when they were a staple of the "100" in the early and mid-1990s. Last year saw three general manufacturing companies make the 2001 Job 100 and this year only four made the list.

This year's crop of big job deals has one industry that is curiously missing. Outside of the services sector, the automotive and transportation industry has been the South's most consistent big jobmaker over the years. Granted, two aviation deals made up the top five jobmakers. But this year's Job 100 only has two automotive deals on it and a total of only four transportation deals. In contrast, last year saw 13 transportation deals making the list with an average of 12 deals making the lists from 1993 to 2000.

The South's automotive and transportation industry was simply caught up in bad timing in 2001. Although there were several automotive-related announcements making the "just missed" category (200 jobs to 477) this year, the really big deals weren't there. As mentioned, the timing wasn't right. Many of Nissan's largest suppliers have not announced in Mississippi as of yet. That plant won't be operational until next year. Secondly, Hyundai announced on April 1, 2002 its intention to build a huge plant (4,000 employees) just south of Montgomery, Ala. But that deal will count in next year's SB&D 100 totals. Last year was just a anomoly for the automotive industry in the South. Automotive is here to stay. Expect a much better showing in the 2003 SB&D Job 100.

2002 SB&D Job 100

Bureau of Labor Statistics Industry Categories

Industry # of 100 Deals

Manufacturing 19
Service 66
FIRE 10
Transportation/Public Utilities 4
Government 2

One industry that's not slowing down a bit is the call center business. After a subpar year last year when 15 call centers made up the 100-largest Southern job deals, this year's call center representation is back on track. Thirty call centers made this year's Job 100. That's more comparable to 2000 when 34 made the list.

Since 1997, call centers have dominated the South's biggest employment deals. Of the 82,826 jobs created by companies that make up the 2002 SB&D Job 100, 22,989 jobs were announced by call centers and customer service centers.

Another industry sector that's thriving is distribution. Distribution deals making the Job 100 have been remarkably consistent. Two years ago, the 2000 Job 100 featured 12 big distribution deals. Last year 11 made the list. This year's 100 has 11 big box distribution projects making up the top 100 job announcements made in the South. Also staying consistent with the past three Job 100 years are Internet-related industries, telecommunications and financial services.

In addition to general manufacturers and automotive-related industries, other highly targeted industries didn't perform this year as well. Aviation, aerospace, oil and gas and computer products had very poor years on the job side (not so poor on the investment side - see the Investment 100 in this edition). While there were two large aviation/aerospace deals making this year's Job 100, normally there are five or six that make the list each year. And, as was the case the last several years, semiconductors didn't show except for a big deal in Austin that failed to make the Job 100 but showed on the Investment 100. That matched last year when there was but one chip expansion making any of our lists. This year's SB&D Job 100 didn't have a single chip or chip-related company make the list.

2002 SB&D Job 100

Industry Sectors # of 100 Deals

Call Centers 30
Distribution 11
Info Tech/Internet Services 8
Financial Services 8
Telecommunications 8
Food Products 5
Electronics 5
Headquarters 4
Transportation 3
Health Care Services 3
Computer Products 3
Back Office 2
Aviation/Aerospace 2
Design & Engineering 2
General Manufacturing 2
Automotive 2
Agribusiness 1
Oil & Gas 1

SB&D Job 100: The States

Every Southern state has an excuse for its poor performance in creating jobs during calendar year 2001. After all, much of 2001, if not all of it, was mired in a recession. Near the end of the third quarter, the most horrific act ever witnessed on American soil occurred. The developments made it convenient for officials of states in the South to point to those two economic negatives as the reasons behind such subpar years.

But all was not lost. Two states emerged as recession proof. Florida and Virginia continued their dominance as incredibly attractive domestic locations. Those two states created tens of thousands of jobs in 2001, recession or not. Florida had a net gain of 228,000 jobs in 2001 and Virginia posted a gain of 126,000. Of all the other Southern states, only Texas can compare with the years Florida and Virginia posted last year.

The Southern States

*Net Gain or Loss in Jobs 2001

Alabama 11,000
Arkansas 39,000
Florida 228,000
Georgia 37,000
Kansas 53,000
Kentucky 21,000
Louisiana --12,000
Maryland 79,000
Mississippi 15,000
Missouri --20,000
North Carolina 26,000
Oklahoma 45,000
South Carolina 36,000
Tennessee 90,000
Texas 287,000
Virginia 126,000
West Virginia --16,000

Source: Bureau of Labor Statistics. *rounded to nearest thousand.

Sure, Texas led the South in net job gains with 287,000. Though, on a per capita basis, Texas cannot come close to the results seen in Florida and Virginia during calendar year 2001. Tennessee and Maryland had banner job gains in 2001, too, on a per capita basis.

There have been some interesting developments regarding large job announcements over the years. In the early 1990s, North Carolina, Florida and Texas dominated the SB&D Job 100. In the mid-1990s, Texas dominated the entire region by itself. For example, in 1996, 53 of the 100-largest employment announcements in the South came from Texas.

Since then however, Texas has been challenged valiantly every year by a trio of surging jobmaking states: Florida, Virginia and Tennessee. In fact, the 1999 SB&D Job 100 saw Florida and Virginia top Texas in the number of Job 100 deals. It was the first time since the "100" was first published in 1993 that Texas was beaten by another Southern state. Then in 2000, Tennessee made its mark by winning "State of the Year."

Since 1999, Texas has retaken the No. 1 position with 23 and 26 of the largest 100 deals respectively. Last year there were no challengers. Second place Virginia posted 13 of the South's top jobmakers and Florida could muster but 10. Yet, just like 1999, Florida has dethroned the Lone Star state again. This year's SB&D 100 features 26 Florida companies making the list compared to 22 from Texas. So, for the second time in 10 years, Texas is not the home of the most big job announcements to occur in the American South the previous calendar year. This year, that honor goes to the Sunshine State.

With 515 points, Virginia apparently proved once again that it's a state that has to be reckoned with each and every year. Thirteen of the South's biggest job deals were announced in Virginia as was the "Deal of the Year." Information technology and internet-related announcements continue to come from the Old Dominion even after the dot-com meltdown.

There were some other bright spots with this "100." South Carolina's dramatic turnaround from a very poor 2001 Job 100 showing should especially be noted. In 2001, the state's primary economic development contact, the South Carolina Department of Commerce, got itself into a media, financial and political mess. It cost its director, one of the most experienced economic developers in the South, his job as the chief recruiter for the Palmetto State. Despite the department's troubles, South Carolina posted seven deals on the Job 100 compared to just one the year before. Also, Missouri had its best SB&D Job 100 year ever with six deals making the list.

As expected, though, there were some real downers. Georgia, with just five deals, has dropped into unfamiliar territory with the likes of Alabama, Mississippi and Kentucky, three states with just a fraction of the Peach State's population. Over the last 10 years, Georgia has averaged eight "100" deals. Furthermore, the Peach State turned 14 Job 100 deals in 1993, 13 in '94 and 13 in '98. This year it posted five. Two-thousand-and-one was, by far, the worst year for Georgia in the 10-year history of the SB&D 100.

Georgia has company, though. North Carolina hasn't been able to recreate its magical years of the early 1990s. In '93 the Tarheel State turned 16 SB&D 100 deals and the 1994 list saw 15 come from North Carolina. The last four years North Carolina has produced three, 10, five and six SB&D 100 deals respectively.

States that performed about like they did last year in landing the biggest deals include Alabama, Arkansas, Louisiana, North Carolina, Texas, Virginia and West Virginia. Those states that garnered significantly more big deals this year than last year are Florida, Missouri and South Carolina. States losing ground in the big deal quest include Georgia, Kansas, Kentucky, Maryland, Mississippi, Oklahoma and Tennessee.

Like Georgia, Kentucky lost some steam this year. The Bluegrass State has been amazingly constistent over the last several years. Not this year. Kentucky fell like a rock in every list we publish in this year's SB&D 100.

The Southern States

SB&D Job 100 Deals 2002 vs. 2001

2002 SB&D Job 100 Deals vs. 10-Year Average

* Not covered by SB&D until 2000 (three-year average). ** Not covered by SB&D until 1998 (five-year average).

SB&D Job 100: Just Missed Deals

Just missed deals, or JMDs, are those projects that are not quite large enough to make the "100," yet are large enough to merit mentioning. This year, all employment announcements between 200 and 482 jobs get the five points that go with just missed deals ("100" deals earn a state or market 10 points). JMD slots change each year based on what the 100th-largest announcement in the region totals. This year the 100th-largest job deal totaled 483 jobs.

Leading the JMD parade this year once again is Texas with 39 deals with announced jobs between 200 and 482 jobs. On a per capita basis, however, Texas' JMD totals are far from an outstanding total. In fact, it's really a very poor performance by recent Texas standards. In 1996, Texas put up its largest JMD total with 86 deals with announced jobs between 200 and the 100th threshold, which back then was 500 jobs.

This year, Florida was right behind the Lone Star State in the JMD category with 38 just missed deals. Other states performing well in the JMD category were Alabama (10 Job JMDs), Kansas (7), Mississippi (9), Missouri (11), Oklahoma (12), Tennessee (23) and Virginia (36). Virginia and Tennessee's outstanding JMD totals have become the norm of late. Those two states have consistently produced dozens of 200-plus job deals each year since 1997.

With just six Job 100 deals and eight JMDs, North Carolina checked in with a mere 14 deals announced with 200 jobs or more. The same holds true for Georgia. That state turned but five Job 100 deals. Add to that its 10 JMDs and you have just 15 deals announced with 200 jobs or more in Georgia. Once again, those two highly populated states -- both have more than 8 million residents and rank as the fourth and third largest states respectively in the South -- are more comparable this year in the SB&D Job 100 to Alabama (12 deals of 200 jobs or more), Kansas (12), Oklahoma (14) and West Virginia (13), states that have a fraction of their population. Compared to their true peers, such as Tennessee (28 deals of 200 jobs ore more) and Virginia (49), North Carolina and Georgia didn't show up this year. We could throw Texas and Florida in that mix, but those two states are really in a category all their own with 21 million and 16 million people.

The Southern States

State # of Job JMDs

Alabama 10
Arkansas 4
Florida 38
Georgia 10
Kansas 11
Kentucky 7
Louisiana 6
Maryland 2
Mississippi 9
Missouri 11
North Carolina 8
Oklahoma 12
South Carolina 7
Tennessee 23
Texas 39
Virginia 36
West Virginia 13

The Southern States

SB&D J-100 and JMDs

State # of deals 200 jobs or more

Florida 64
Texas 61
Virginia 49
Tennessee 28
Missouri 17
Georgia 15
North Carolina 14
Oklahoma 14
South Carolina 14
West Virginia 14
Alabama 12
Kansas 12
Mississippi 11
Kentucky 9
Louisiana 7
Arkansas 5
Maryland 3

SB&D Job 100: Per Capita Performance

The only true measure of a state's success at attracting large job commitments from site searching companies is how they perform on a per capita basis. Factoring the state's size and population is certainly important in the Southern region. There is a wide gap among the states beginning with West Virginia, with just 1.8 million residents all the way to Texas, which has 21 million people living within its borders. There is no way you can compare the totals produced by those two states unless you do it on a per capita basis.

Each year Southern Business & Development factors in the number of SB&D Job 100 and Job JMD deals turned by each state per million residents. Looking at the "100" this way changes the makeup of the ranking.

The Southern States

SB&D Job 100/JMD Performance Per Capita

State # of deals per million people

West Virginia 7.7
Virginia 6.9
Kansas 4.6
Oklahoma 4.1
Mississippi 4.0
Tennessee 4.0
Florida 3.8
South Carolina 3.5
Texas 3.4
Missouri 3.0
Alabama 3.7
Kentucky 2.3
Arkansas 1.9
Georgia 1.8
North Carolina 1.7
Louisiana 1.6
Maryland 0.6

All in all, the 2002 SB&D Job 100 is one to forget. The 82,000 jobs created by the Job 100 is the lowest total in years. It's very obvious, with five consecutive years of diminishing Job 100 returns, that the South's growth is slowing each and every year. The region has seen nearly a doubling of its population since 1970, compared to a decrease of five million in the Northeast. Regardless, look for a rebound in the SB&D Job 100 in 2003, its first since 1998.

View 2002 Job 100 Chart

If you wish to respond to this article, email Mike Randle at mike@sb-d.com