Around the South - Summer 2017

Amazon accepting bids for new $5 billion second headquarters


Seattle-based Amazon wants a second headquarters, and the company has put it up for bid. CEO Jeff Bezos said in a press release that he expects the $5 billion project to “be a full equal to our Seattle headquarters,” where more than 40,000 people work. Some of the criteria to be met, according to Amazon, are communities of at least 1 million in population, an international airport and a “stable and business-friendly environment.”



The best cities in the South for Amazon’s HQ2


SB&D has come up with its five best cities for Amazon’s second headquarters in the American South:


Atlanta l Atlanta has the world’s largest international airport and several Fortune 100 companies are headquartered there. More than 5.7 million people live in the Atlanta metro and nearly 100,000 moved there last year.


Dallas-Fort Worth l There is plenty of land and labor in the Dallas-Fort Worth mega-region, which is now home to Toyota’s new North American headquarters and many others, including ExxonMobil and American Airlines. Dallas-Fort Worth welcomed more than 140,000 new residents last year.


Austin l Austin is a tech mecca with a vibrant labor base, and Amazon might want to take a look at the area, including the Hutto-Taylor megasite and San Marcos. This summer, Amazon purchased Whole Foods, which is headquartered in Austin. About 58,000 people moved to Austin last year.


Northern Virginia l Northern Virginia has a large young population and birth rates there are some of the highest in the South. You can go anywhere in the world from the Dulles International Airport.


Northern Kentucky l Probably a reach, but Amazon is building its largest global air-freight hub at the Cincinnati/Northern Kentucky International Airport. The $1.5 billion, 2,700-job hub will be the home to Amazon Prime Air.



Two unique worker training facilities slated for the South

In September, Lockheed Martin opened its $2 million, 7,000-square-foot Advanced Manufacturing & Technology Center located near its missile plant in Troy, Ala. The center, funded by AIDT, Alabama’s workforce development agency, will allow Lockheed employees and local military members to train and advance their educations online.


Also in September, ground was broken on a unique training center that will serve companies locating in the Commonwealth Crossing Business Centre in Henry County, Va. Shown above, the Commonwealth Centre for Advanced Training (CCAT), the 25,000-square-foot training center will enable companies to recruit, hire and train employees on-site. Commonwealth Crossing features 160 acres of pad-ready sites near the North Carolina-Virginia border (only 33 miles from the Greensboro (N.C.) International Airport), and it is rail-served.



FDI driving the South’s economy


A report by Reuters in the summer quarter showed that out of 656,000 new manufacturing jobs created in the United States between 2010 and 2014, two-thirds were created by foreign-owned companies. Using federal jobs data and estimates from SB&D, the South captured roughly half of those manufacturing jobs created from 2010 to 2014 and nearly 58 percent of the jobs created by foreign-owned firms. In calendar years 2015 and 2016, over $700 billion in foreign capital was invested in the U.S., with an estimated $360 billion spent in the 15-state Southern region. Of that $360 billion, nearly $30 billion was spent on acquisitions and greenfield deals by the Chinese. 



After years of negotiations, China has agreed to open its domestic market for U.S. rice exports for the first time ever, acknowledging its need for foreign shipments to meet the growing demands of its vast middle class. China consumes the equivalent of the entire U.S. rice crop every 13 days.U.S. and China sign rice agreement

A historic trade agreement with China will allow exports of milled rice from the United States. “This is a, I don’t want to say a saving grace, but it’s definitely a huge accomplishment for the rice industry as a whole,” said Glenden Marceaux, a rice farmer and president of the Louisiana Independent Rice Producers Association. China consumes the equivalent of the entire U.S. rice crop every 13 days.



Manufacturing critical to rural areas of the South

For the year 2015, manufacturing represented a 14 percent share of private non-farm rural jobs and a 21 percent share of rural earnings, according to a report by the USDA that came out in the summer titled, “Rural Manufacturing at a Glance.” According to the report, urban areas saw 7 percent of total employment and 11 percent of earnings come from the manufacturing sector in 2015.



Dallas Fed President says the U.S. needs more immigrants to achieve stronger growth

Dallas Fed President Robert Kaplan said in August in an interview with CNBC that the U.S. needs an aggressive but responsible approach to immigration. He explained that demographics have our backs against the wall regarding available labor, and that situation is one of the reasons the U.S. economy has been growing so slowly. The nation’s population grew by less than one percent last year. “One of the big challenges we face in the United States and one of the reasons GDP growth has been so sluggish is our population is aging and our workforce growth has been slowing,” Kaplan said.



Houston lost more manufacturing jobs in 2016 than any other U.S. market

Data released in the summer quarter from the Bureau of Labor Statistics showed that Harris County, home of Houston, lost 19,000 manufacturing jobs in 2016, the most of any county in the country. The losses were tied to the oil and gas market, which is linked to metal manufacturing and other sectors. With 3,600 manufacturing job gains, Jefferson County, Ky., (Louisville) led the nation, followed by Fulton County, Ga., (Atlanta) and Dallas, Texas.


Southwest Louisiana: The nation’s largest LNG export cluster

It wasn’t too long ago that Cheniere Energy built an LNG import facility in Cameron Parish, La., at a cost of billions of dollars. Because of the massive increase in fracking over the past six or seven years, Cheniere reversed course and turned the import facility into the nation’s first large-scale LNG export facility at a cost of billions more. The Houston-based company exported well over 100 tanker loads of liquefied natural gas in 2016. The company has already begun profiting from the venture, and others have noticed. Eight other companies are in the planning stages of building their own LNG export facilities in and around Lake Charles, La., at a cost of billions each. Magnolia LNG and Lake Charles LNG have received permits and are waiting on buyers before making final investment decisions.



Kentucky has become the center of aluminum manufacturing for the automotive industry

In the spring quarter, Braidy Industries announced it will build a $1.3 billion aluminum mill in Greenup County in Eastern Kentucky. The plant will produce aluminum sheet and plate for automotive plants in the South and Midwest. The deal will create 550 jobs. With Ford using more aluminum in its vehicles that are built in Louisville, the plant is needed. Also, Toyota is undergoing a $1.3 billion expansion of its plant in Georgetown, Ky., part of which is to accommodate more aluminum parts in its vehicles assembled there. The move convinced Logan Aluminum, which for decades has made aluminum cans in Logan County, Ky., to invest $248 million in the plant to produce aluminum parts for cars and trucks.



Oklahoma’s aviation and aerospace sector is massive

Since 1994, the aviation and aerospace industry in Oklahoma has grown by 250 percent, and today there are 1,100 companies in the field, according to the Oklahoma Aeronautics Commission. The aviation and aerospace industry in Oklahoma generates $43.7 billion annually in economic activity, making the sector the second largest in the state behind oil and gas.



Georgia named top aerospace state in new ranking

The 2017 Aerospace Manufacturing Attractiveness Ranking by PwC came out in the summer quarter and Georgia was named by the giant accounting and consulting firm as the No. 1 state for aerospace. Other states making the top 10 in the South were North Carolina (4), Virginia (5), Florida (6), and Texas tied for 8th. Michigan, Arizona, Ohio, Colorado and New York made up the top 10.



Study shows that South Carolina has the lowest manufacturing operating costs in U.S.

New Jersey-based site selection firm The Boyd Company released a study in the summer that showed that South Carolina ranked lowest in the cost of operating an advanced manufacturing plant in the U.S. The study measured key cost factors such as real estate, labor, energy and taxes. The study based costs on a hypothetical 225,000-square-foot plant employing 500 workers, and determined that South Carolina was the least expensive place to operate with an annual cost of $30.1 million. New Jersey was the most expensive place to operate the same manufacturing plant at almost $40 million a year.



Louisiana tops all states in energy consumption

Louisiana is the nation’s largest energy consumer, based on population. The U.S. Energy Information Administration reported that Louisiana used 912 million British Thermal Units of energy per person in 2015 (the latest data available). Total energy consumption includes all energy sources such as coal, natural gas, nuclear and renewable sources.



Texas adds more jobs than any other state

From August 1, 2016 to August 1, 2017, Texas added nearly 300,000 jobs, more than any other state during that period. The labor department said the largest jump in employment came from the leisure and hospitality sector in the Lone Star State.  



Louisiana claws out of recession

After two long years, it looks as if Louisiana has clawed its way out of the recession it was in. In the summer, the state reached a three-year low in its unemployment rate and is now creating jobs instead of losing them. However, at 5.2 percent, the rate is still higher than the national average of 4.4 percent.



Louisville ranked No. 1 by Forbes in manufacturing resurgence

In the summer quarter, Forbes ranked Louisville the No. 1 city in the nation where manufacturing is thriving. Much of Louisville’s manufacturing base is in the automotive sector with two Ford plants in the city and a Toyota plant nearby. The Louisville region’s manufacturing jobs have increased by 30 percent since 2011.



Now we know what Apple does in Austin

For years, Apple has kept what its 6,000 employees in Austin do a secret. But in the summer quarter, Apple CEO Tim Cook visited the Austin facilities and said more employees will be hired there. Cook revealed that about 50 percent of the Austin staff works in customer support and online sales. He also explained that about 15 percent are in engineering and about the same in operations.



Nashville named top U.S. city for high-wage job growth

In the summer quarter, Forbes ranked Nashville as the top city in the nation for high-wage job growth since 2011. Nashville has created 160,300 high-wage jobs since 2011, according to Forbes, or a growth rate of 42.6 percent. Second place Kansas City saw a 28.4 percent increase in high-wage growth in fields such as research and development, law, accounting, architecture, engineering and computer system design.



Austin, Nashville lead in job generation since recession

In the summer, the U.S. Bureau of Labor Statistics released private sector job data for more than 300 metropolitan areas. During the last decade, Austin led all markets in private sector job gains with an increase of 38 percent. Nashville placed second with job gains of 25 percent.



One Gulf Coast port is responsible for 30 percent of the nation’s oil exports... and it’s not Houston

Shipping oil overseas is a relatively new thing in the U.S. From the 1970s to December of 2015, it wasn’t allowed. But with the U.S. pumping more oil than domestic refiners can handle, Congress lifted the oil export ban and one Gulf Coast port has a jump on the competition. The Port of Corpus Christi was the No. 1 port for U.S. crude exports last year, besting the congested Port of Houston. In fact, in the first quarter of this year, ships carrying 22 million barrels of oil (30 percent of the country’s total exports) left Corpus Christi docks bound for foreign countries.



Texas port ready to be deepened

The U.S. Army Corps of Engineers and Port Corpus Christi agreed to terms to deepen the port’s ship channel in the summer quarter. The $326 million project will deepen the ship channel from 45 feet deep and 400 feet wide to 54 feet deep and 520 feet wide.



New port slated for Southwest Louisiana

A massive new port is slated to be built over the next four years on the Calcasieu Ship Channel in Cameron Parish, La. The location is near Lake Charles, La., and the Louisiana-Texas border. Peterson Offshore Group, a Dutch international energy logistics company, signed a letter of intent to lease 1.2 million square feet of space at the new port, called Port Cameron. The company will co-manage the port, which will serve the Gulf of Mexico’s energy industry. The port is being built on 500 acres, with 750 acres available for expansion. Eight thousand construction jobs and about 4,000 permanent jobs will be created.



Container volumes at the Port of Charleston set record highs for fiscal year 2017. The large ship-to-shore cranes were purchased specifically for big ships such as the vessels carrying 13,000 cargo boxes, now seen as the new workhorse for containerized cargo shipments between Asia and the United States.Port of Charleston sets container volume record

Container volumes at the Port of Charleston set record highs for fiscal year 2017, according to the South Carolina State Ports Authority. Volumes are up 10 percent compared to fiscal 2016. The port moved 2.14 million TEUs, or 20-foot containers in fiscal 2017.



Georgia Ports Authority has record year

The Georgia Ports Authority set a new record for cargo in fiscal year 2017. Georgia’s ports handled 3.85 million 20-foot containers in fiscal year 2017, an increase of 6.7 percent over the previous year.



Huntsville named fastest growing tech city

According to ZipRecruiter and Payscale, Huntsville, Ala., ranks at the top nationally for year-over-year job growth in the technology industry. The two companies looked at over 8 million active tech jobs in the U.S. to come up with the ranking. Huntsville had a growth rate of 309 percent. Thousand Oaks, Calif., and Phoenix ranked second and third. Orlando, Nashville and Jacksonville (Fla.) also ranked high in the study.



Five Southern markets make “Best Cities for College Grads” list

In the spring, came out with its best cities for recent college graduates, and a pair of Ohio towns were ranked first and second. Following Cincinnati and Columbus in the South were Nashville; San Antonio; Lexington, Ky.; Austin and St. Louis.



Renewable energy passes nuclear power

Renewable energy sources from the combined total of wind, solar, hydro, biomass and geothermal now provide more electricity than nuclear power, according to the U.S. Energy Information Administration. In the second quarter of 2017, renewable sources provided 21.6 percent of U.S. net electrical generation, while nuclear provided 20.34 percent. Natural gas continues to lead power generation followed by coal, which has dropped considerably.



Duke kills nuclear plant, plans $6 billion in solar and battery

Duke Energy Florida will cease plans to build a nuclear plant in western Florida. Instead, the utility will invest $6 billion in solar panels, grid-tied batteries, grid modernization projects and electric vehicle charging areas.



Durham, N.C., named best place in U.S. for millennials

Growella, a money management website for young adults, named Durham the No. 1 place in the country for millennials to live. Pittsburgh came in second and Nashville; Charlotte; Austin; Greenville, S.C.; and Houston all made the top 10.



Deals at deadline


The Autocar Company, an American manufacturer of severe-duty, Cab Over Engine trucks, has changed hands a few times since its founding in 1897. However, its distinct look has not changed much over the years. Autocar recently announced plans to build a $120 million facility near Birmingham, Ala. The deal will create 746 jobs.Meggitt Polymers & Composites, a manufacturer of environmental components, is expanding its facilities in Rockmart, Ga. The company, which employs more than 1,000, will invest $30 million and add 211 jobs. Autocar, a manufacturer of a wide variety of trucks, announced plans to build a $120 million facility near Birmingham, Ala. The plant will assemble heavy-duty, Cab Over Engine trucks. The deal will create 746 jobs. Miyake Forging announced it will build a 45,000-square-foot facility in Hawkins County, Tenn. The bearings manufacturer will invest $13.7 million in the plant that will house 60 workers.


Atlanta-based Georgia-Pacific announced it will construct a $100 million lumber production facility in Talladega, Ala. The $100 million, 300,000-square-foot plant will house 100 full-time employees. Walmart’s headquarters in Bentonville, Ark., is a collection of more than 20 buildings built in the 1970s that are spread out across several different communities in Northwest Arkansas. In September, the nation’s largest employer, with 1.5 million employees, announced it will build a new headquarters campus in Bentonville on a 350-acre site. The new headquarters will house up to 17,000 employees and will be built over the next five years.


Granges, a manufacturer of aluminum products based in Sweden, is investing $110 million in its plant in Huntingdon, Tenn., to expand capacity from 160 to 200 metric kilotons per year. The company makes light gauge foil and automotive heat exchanger products. The deal will create 100 new jobs. Canada-based New Flyer, North America’s largest transit bus manufacturer, is expanding its plant in Anniston, Ala. The company is investing $25 million and adding 40 new jobs.

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