2003 SB&D Job 100

Record Lows Set by 2003 SB&D Job 100

A Paltry Job 100, Yet, Small States in the South Emerge

By Lee Burlett

One of the best ways to use the SB&D 100 in an effort to judge the performance of the South's economy is to look at the threshold created by the ranking each year. Back in the early and mid-1990s, the 100th-largest announcement, which sets the ranking's threshold, averaged around 475 jobs. Therefore, any announced project of around 475 jobs or more made up the top 100 job deals announced in the South between 1993 and 1996.

In 1997 the threshold sped past the 500 mark and averaged around 550 jobs until 1999. That year (the 2000 SB&D 100), the threshold rose to a record high of 600 jobs, which was matched by the 2001 SB&D 100.

But the 2002 Job 100, based on deals announced in calendar year 2001, saw the first decline in the "Job 100" threshold in the ranking's history. The threshold last year dropped to 483 jobs, the third-lowest ever. Only the 1993 and 1994 SB&D Job 100, with 450 jobs, generated lower thresholds than last year.

While we've already digested plenty of data regarding the economy of calendar year 2002, here's some information that's been unavailable until now. The threshold of this year's SB&D Job 100 has dropped to an all-time low of 320 jobs. That's a loss of over 160 jobs from last year's relatively poor threshold, indicating job generation in the South -- the most active new job generating region in the U.S. for more than two decades -- is at its lowest ebb since this magazine began tracking it in 1992.

2003 Job 100 Totals are Half That of 1997

In addition to the lowest threshold in "100" history, the 2003 SB&D Job 100 created an announced total of just 68,651 jobs. That means the South's largest deals announced in calendar year 2002 averaged just 687 jobs. Compare that to the 1997 SB&D Job 100's total of 136,442 jobs generated by the South's 100-largest announcements, or 1,364 jobs per "100" deal, the ranking's highest total ever, and you can see that in seven years this premier list has lost half of its job generating power.

More specifically, let's look at the last four years. In the 2000 and 2001 Job 100s, the average significant job-maker in the South totaled 1,124 jobs, 102 jobs short of the average big deal from 1994-1999. Meanwhile, in the last two years, that average has dropped to 757 jobs per large job announcement in the American South. Ouch!

>From 1993 to 1996, total jobs created by the SB&D Job 100 increased each year, peaking at 136,442 jobs in 1997. Since 1997, however, total jobs created by the South's biggest job makers have decreased (see adjacent chart).

Chart No. 1

Total Jobs Created by SB&D Job 100 1997-2003

Year     Jobs Created

1997    136,442
1998    125,226
1999    116,721
2000    113,136
2001    111,758
2002    82,826
2003    68,651

One Bright Spot Found in the Muck

We describe mega-deals as those with announced initial employment of 2,000 jobs or more. These are deals that have the potential to transform a state's economy through spin-off employment created by suppliers that can generate thousands more jobs than those announced by the mega-project itself. Last year's SB&D Job 100 featured just two mega-deals, down from eight in 2001. While virtually everything about this year's Job 100 is negative compared to other years, it's mega-deal total actually rose from two last year to five this year, a pretty healthy increase.

The reason mega-deals increased this year can be attributed to one industry: automotive. The automotive industry accounted for two of the South's six mega-job deals and three of the top 10 job announcements made in the South last year. Those are: No. 5 Hyundai: 2,000 jobs (Montgomery, Ala.); No. 6 Honda: 2,000 jobs (Lincoln, Ala.) and No. 10 Nissan: 1,300 jobs (Canton, Miss.).

While mega-deals of 2,000 or more announced jobs increased this year over last, the magical 1,000-job mark saw few deals making the list. In fact, 2002 was a miserable year for 1,000-plus job deals. Only 14 made this year's Job 100 list while 34 made the list last year. So here is an interesting question: If 2001 was a recession year, yet 34 companies in the South announced deals in the 1,000-1999 job slot (44 announced 1,000 or more job deals in 2000), what do you call 2002's economy when only 14 companies made a commitment of 1,000 or more jobs?

The 14 1,000-plus job deals making this year's Job 100 is the lowest ever. Only 1993 and 1994, with 17 and 18 respectively, can compare to this year's total of 14 announcements of 1,000 jobs or more.

Another Bright Spot: The Small State Theory in a Major Downturn

We theorized in the Summer 2002 edition that small states in the South (under 5 million in population) are benefiting to a degree in this economy, while there is absolutely zero benefit found in the South's largest states. We continued with our theory in the Fall 2002 edition, when we placed some of the South's smallest states at the top of our first annual Southern State Business Climate Index.

In both editions, we argued that Southern states such as Alabama, Arkansas, Kansas, Kentucky, Mississippi, Oklahoma, South Carolina and West Virginia (under 5 million in population) seemed to be weathering the depressed economy better than the South's largest states like Florida, Georgia, Maryland, Missouri, North Carolina, Texas and Virginia (over 5 million in population).

Our theory, first published nine months ago, centered on the argument that the telecom, dot-com and energy trading sectors, all hammered to submission in 2001 and 2002, never made it in significant numbers to the South's smallest states. Those new economy industries were concentrated in the South's largest states almost exclusively, hence affected them directly while having little effect on Alabama, Mississippi, Oklahoma and West Virginia, the only four states being positively cited in this year's SB&D 100.

The results found in this, the 2003 SB&D Job 100 edition, completely support our theory published in editions last year and earns us sort of a satisfied closure. If anything, we went way out on a limb with our predictions at mid-year that smaller states in the South were indeed outperforming larger states in 2002 when we did not have conclusive 2002 job generation totals like we have now. In fact, a few daily newspapers in the South took issue with our theory that small Southern states were outperforming large ones, especially one published in Little Rock. Apparently those newspaper editors were so conditioned to sucking up to larger states and slamming their own economies that they couldn't imagine a positive thrown their way. Our information must have freaked them out and why not since the economies of states such as Alabama, Arkansas, Mississippi and Oklahoma have always taken a back seat to their neighbors.

But more than anything, those newspapers simply didn't believe us. They, like many people in today's world, are too suspicious and skeptical. We went so far out on a limb in mid-year 2002 that we even took a few jabs at a couple of competitors who kept larger Southern states at the top of their business climate rankings. Until that time, we had never gone that far to support one of our arguments and we felt very uncomfortable doing it. But we felt it needed to be done. Now that the official totals are in, it's very satisfying that we were right, even when we didn't have all of the data, and they were wrong.

Only Five States Increase Job 100 Points

Yes, our predictions that big things were indeed happening in small packages in 2002 did come true when the final tally arrived. For example, there were only five states in the South that increased their Job 100 point totals this year over last year. And those states are Alabama (280 points this year compared to 120 last year); Arkansas (55/50); Kentucky (120/100); Oklahoma (175/120); and West Virginia (120/65). Is there a running theme among that list? Well, every one of them are small Southern states. Not a single large Southern state increased its point total from last year's SB&D 100 to the one published here.

Now, don't think we take satisfaction in reporting that large Southern states are struggling in this woeful economy. Nothing could be further from the truth. We have absolutely dazzled you over the last 10 years with job generating performances by Texas, Florida, Georgia, North Carolina, Tennessee and Virginia. For the most part over the last 10 years, those states have not only led the South in large job generating projects, they have dominated the nation.

In fact, one of those large Southern states has won the SB&D 100 "State of the Year" every year over the last 10 years (you will have to read on to see who won "State of the Year" this year) and they have also made up the bulk of our "Honorable Mentions." Not only has a small Southern state not won "State of the Year" from 1993-2002, only Kentucky (1993), Alabama (1994), South Carolina (1995), Louisiana (1998), Alabama (2000), West Virginia (2001) and Mississippi (2002) have earned "Honorable Mention" honors. From 1993-2002, there have been 22 state honorable mentions and as you can see, only seven have been earned by small states in the South.

So, it should be noted that one of the bright spots in the 2003 economy, an economic landscape where the SB&D Job 100 threshold has dropped by nearly one-half of its all-time high reached in 1999 and 2000, is that small states in the South are being discovered by major corporate players and are now outperforming the region's large states for the first time in over 10 years.

New vs. Expanded

Surprisingly, this year's list of the 100-largest employment announcements in the South is the first to feature more new projects than expanded since the 1998 SB&D Job 100. Prior to 1998, every Job 100 saw more new projects than expanded making the list. Then 1999 started a four-year run where expanded projects exceeded new projects. Needless to say, it is unusual that in one of the toughest economies in years, new projects topped expanded deals. But that's exactly the case with this group.

Last year there were 43 new projects and 57 expansions. The year before that, 40 new projects and 62 expansions. This year's crop of big job deals features 54 new projects and 46 expanded announcements.

Industry Trends: Job 100

While it's clear that small Southern states stood out in this the second SB&D 100 during a depressed economy, another rarity has occurred as well. Manufacturing, which has taken a back seat to services every Job 100 year since 1996, showed very well with 48 deals making the list. Nineteen-ninety-six was the last SB&D Job 100 that saw more manufacturers make the top 100 job deals than services. That year 54 manufacturers were part of the top 100 job making announcements.

But as you can see by the adjoining chart, other than a hickup in 2002, manufacturing has seen a steady increase in major job announcements since sinking to a then all-time low in 1999. Could manufacturing be making a comeback in the American South? It depends on who you talk to. Officials of Southern states where low-wage manufacturing has been operating for decades will tell you the sector remains depressed. Officials in states where high-wage, high-cost product manufacturing, such as that found in the automotive industry, electronics and pharmaceuticals, will tell you their manufacturing sector is chugging along like never before.

Is manufacturing dead in the South as a result of NAFTA, as some daily newspaper business section honks have written over the years? Not hardly. If anything, NAFTA has weeded out the worst and given them a free ticket to foreign lands, while giving an opportunity to the best, such as foreign manufacturers wanting to operate in the world's most impressive business location that is the American South. Guess what, folks? The best is yet to come for the manufacturing sector in the South. Now that's also going out on a limb!

Chart No. 2

SB&D Job 100 Industry Trends

Year      Mfg     Service

1993      62          38
1994      66          36
1995      64          38
1996      54          47
1997      32          68
1998      35          67
1999      21          82
2000      28          76
2001      37          69
2002      15          85
2003      48          52

Editor's Note: Many years find a tie at the 100th deal, therefore some Job 100s feature more than 100 deals.

While the 48 manufacturing deals making the Job 100 is the best effort since 1996, it should be noted that the lowest threshold in the 10-year history of the ranking has allowed many manufacturing job announcements to make the list. Manufacturing deals have always dominated the SB&D Investment 100 as a result of their capital intensive nature. Yet, typically, a 350-job manufacturing announcement, which is a common deal in the South, would never make the Job 100. But a 350-job deal made the "100" this year.

A standard Job 100 year would find financial services, telecoms, call centers, healthcare and internet-related deals dominate the ranking. If there is anything to learn about the industry trends concerning the 2003 SB&D Job 100, it's that the manufacturing sector held firm, if not increased its big deals, and the services sector fell dramatically in terms of large job announcements during calendar year 2002.

Automotive/Transportation again led all manufacturers with 12 big deals in this year's "100." That sector hit right on its average of 12 making the 100 since 1993. Pharmaceuticals placed second this year on the manufacturing side for the first time ever. But what is most interesting is that the rest of the big jobs deals coming from the manufacturing side of the ledger were a mix like that not found since 1994. In fact, that mix can best be described as odd-lot manufacturing.

In last year's Job 100 we wrote, "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."

But this year, because of the lowered threshold, general manufacturing made its mark. On the 2003 Job 100 you will find companies that produce spas, windows, refrigerators, kitchens, rugs, apparel, bath sets and upholstered furniture.

On the services side, call centers once again topped all other big job deals with 16 making the "100." It's the seventh year out of the last nine that call centers have bested all other primary and sub-industry sectors. But the dominance slipped this year. Call centers landed 30 deals on the 2002 Job 100, 15 in 2001 and 34 in 2000.

Also performing well on the services side of the Job 100 were the typical suspects. Distribution landed 11 deals on the list and financial services turned seven deals.

Industry Trends: Job Just Missed Deals

While services just barely beat out manufacturers in this year's Job 100, the manufacturing sector blew the white collars away in the "just missed deal" category. JMDs are those corporate and industrial announcements that are significant (200 jobs or more), yet did not make the top 100 employment announcements made in the year. Normally, the JMD category sees a much more competitive showing by manufacturing and this year is no different. Manufacturers rung up 97 JMDs while services could muster but 63.

Leading the manufacturing parade again is the automotive sector with 24 just missed deals. It's the first year since 1996 that a manufacturing category topped a services category in the JMD division. Also showing well this year were plastics, furniture, pharmaceuticals, metals, textiles and apparel (yes, that's right, textiles and apparel).

As for services, little has changed. Call centers, distribution and financial services topped this year's JMD list.

2003 SB&D Job 100: The States

Naturally, over the years large Southern states have dominated the Job 100. Case in point: In 1997, Texas alone accounted for 53 of that year's Job 100 and 95 out of the 111 largest job annoucements in the South came from large Southern states (there were 12 deals that tied for the threshold spot in 1997, which was 500 jobs).

Even the last few years, when the economy wasn't humming anywhere near that of the mid-1990s, large Southern states could argue they should pay rent on the Job 100 because they resided there so readily and in such great numbers.

For example, last year 84 of the top 100 job deals announced in the South came from Florida, Georgia, Maryland, Missouri, North Carolina, Tennessee, Texas and Virginia, or states in the South with 5 million in population or more. The year before that 78 of the largest 100 job deals in the South came from large states.

But this, the 2003 SB&D Job 100, should be titled "The Year of the Small Southern State" because 40 of the South's largest job deals were announced in Alabama, Arkansas, Kansas, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina and West Virginia and only 60 came from states with over 5 million in population.

In the 10 years of the Job 100, there has never been a year when: (a) Alabama topped Georgia, North Carolina and Tennessee; (b) Oklahoma topped Georgia and North Carolina; (c) Mississippi topped Georgia and North Carolina; and (d) Texas' point total didn't surpass that of Alabama, Arkansas, Kansas, Kentucky, Oklahoma, South Carolina and West Virginia combined (Not only did Texas' total not surpass those states this year, it didn't even come close. Selected small states: 32 Job 100 deals; Texas: 10).

This year's Job 100 saw large states, especially Georgia and Texas, fall to big job deal lows not only never seen, but never imagined. For the first 10 years of the Job 100, Georgia averaged almost nine deals making the list while Texas averaged almost 29. This year Georgia posted one deal and Texas 10, or 27 deals off their collective average. The adjoining chart shows each Southern state's 2003 Job 100 performance compared to its 11-year average.

Chart No. 3

2003 SB&D Job 100
Deals vs. 11-Year Average
(bold indicates large Southern states)

*Seven-year average
**Five-year average

We'll save you some math time by revealing that in the last decade, large Southern states have averaged a full 86 percent of the Job 100. This year their average dropped to 60 percent. Furthermore, the adjoining chart shows that this year, small states turned 40 big job deals.

2003 Job JMDs: The States

But on the Job "just missed deal" side, this year's results were indicative of a more normal SB&D Job 100. Large Southern states accounted for 107 JMDs, while small states rung up 59. That's a better showing by small states compared to the 10-year average but not by much. A doubling of Job JMDs (those deals of 200 jobs or more up to the Job 100 threshold) by large states is about right. The last 10 years show a JMD average of 221 coming from large states and 106 JMDs coming from small states.

In yet another indication that the South and the nation's economy as a whole, is falling way back in new job generation can be seen by how many JMDs there were this year compared to the 10-year average. The South has averaged 327 deals that created 200 jobs up to the annual Job 100 threshold. This year that total was 166, or about half the 11-year average.

We mentioned the rest of the country, including the Northeast, Midwest and West in that last statement because according to the Bureau of Labor Statistics, the South is currently creating many more new jobs than any of the other three regions. If the South's performance at creating jobs is at a 11-year low, what is happening in the other three U.S. regions? It can't be pretty because it's pretty ugly here!

Chart No. 4

2003 SB&D Job 100 & Job JMD State Totals
vs. 2002 State Totals
(deals 200 jobs or more)

As you can see by adjoining chart No. 4, there were only 265 corporate and industrial deals announced in the South in calendar year 2002 that will create 200 jobs or more. But it was the year 2001, not 2002, that found the U.S. in a "recession" and during that year there were 339 deals announced with 200 jobs or more. By comparison, in calendar year 2000, 463 deals announced in the South created 200 jobs or more and 1999 saw 471.

Southern states that saw their big job deals drop dramatically this year from last year include Florida, Georgia, Kansas, Missouri and Texas. States relatively holding their own this year include Arkansas, Kentucky, Louisiana, Maryland, North Carolina, Oklahoma, South Carolina, Tennessee, and West Virginia. There were only two states that stood out in this year's Job 100 and they are Alabama and Mississippi. Alabama added five big job deals to their 2002 total of 12 and Mississippi added eight deals. The only states that performed better at turning more 200-plus job deals over last year were Alabama, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, Tennessee and West Virginia.

You can e-mail your comments to the writer at
lee@sb-d.com