If trade restrictions are implemented, the South will lose more economically than any other region

By Michael Randle

 

International trade is incredibly important to the South as a whole, and especially to states such as Kentucky, Louisiana, Tennessee, South Carolina and Texas. Those five states have a greater international trade share of GDP than all other states in the U.S. except Michigan.

 

The chart here shows GDP for each U.S. region in 2016 and the volume of international trade activities as a share of each region’s GDP. The average trade share for U.S. states in 2016 is 16.7 percent ranging from a low of 4.7 percent for South Dakota to a high of 38.9 percent for Michigan. The South’s average trade share of total regional GDP was 20.5 percent, the highest in the nation.

 

Southern states are manufacturing- and energy-intensive, therefore their economies are highly globalized. Most Southern states also depend on foreign trade for a large portion of their state’s economic output. The South is also home to 19 major automotive plants and two of the three final assembly facilities of jetliners in the U.S. Shown here are also selected Southern states and their GDP and share of GDP by international trade value in 2016.

 

Region	GDP	Trade Share of GDP
U.S. South	$6.1 trillion	20.5 percent
U.S. Midwest	$3.4 trillion	16.7 percent
U.S. Northeast	$4.2 trillion	15.8 percent
U.S. West	$4.6 trillion	13.0 percent
State	GDP (in billions)	Trade Share of GDP
Kentucky	$197	35.1 percent
Louisiana	$235	34.6 percent
Tennessee	$329	32.5 percent
South Carolina	$210	32.1 percent
Texas	$1,616	28.6 percent
Georgia	$525	23.2 percent
Mississippi	$108	22.7 percent
Alabama	$205	21.0 percent

Source: U.S.

Census Bureau

 

BMW CEO threatens to pull out of Southern Auto Corridor if trade restrictions are passed

BMW employs nearly 10,000 at its plant in Spartanburg County, S.C. That doesn’t count the tens of thousands more American workers that supply the German automaker’s only U.S. plant. . .its second largest plant in the world. Payroll at the plant alone exceeded $745 million last year. The facility is the only place where its X models are made, and last year the company exported $10 billion in X models through the Port of Charleston to over 140 countries. In the fall quarter, BMW CEO Harald Krueger said on BMWblog.com that he is optimistic that trade restrictions will not be implemented by the U.S. But if they are, Krueger said, “If we would have trade barriers, maybe we would need to shift that production from here (South Carolina) to somewhere else because it can no longer be affordable.” It should be noted that all of the 19 major automotive assembly plants in the Southern Auto Corridor export their vehicles.

 

FDI drives the South’s economy

A report by Reuters in the fall quarter showed that out of 656,000 new manufacturing jobs created between 2010 and 2014 in the United States, 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 63 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. 

 

Plans show Los Angeles company to develop 10.3 million square feet of space in Atlanta’s “Gulch.” Is it Amazon?

The Gulch in downtown Atlanta is a 120-acre site, and it is the primary site Atlanta leaders are promoting to Amazon for its second headquarters. An October 30 filing with the city shows that Los Angeles-based CIM Group has plans to develop 9.3 million square feet of office space and 1 million square feet of retail space at the Gulch. The site is near CNN and Philips Arena. The development essentially matches the specs for Amazon’s proposed second North American headquarters, dubbed “HQ2.” Unnamed sources have said that the CIM project is related to Atlanta’s bid for Amazon. The Gulch meets all of Amazon’s criteria, including mass transit.

 

Amazon short list announcement expected in early 2018

Amazon was expected to announce the short list of sites in the running for its $5 billion, 40,000-plus employee second North American headquarters — HQ2 — by December 1. That has now been moved to sometime in early 2018.

 

Betting site says Atlanta is it for Amazon HQ2

Betting website Paddy Power puts Atlanta’s odds at capturing Amazon’s second headquarters at 2-to-1, the best odds in North America. Following Atlanta are Austin (3-to-1), Boston (6-to-1), Toronto (7-to-1), Pittsburgh (14-to-1) and Dallas-Fort Worth at 16-to-1.

 

Lenovo to establish three AI innovation centers

Lenovo, the Chinese computer manufacturer, is establishing one of its three artificial intelligence innovation centers at its North American headquarters in Morrisville, N.C. Lenovo announced it will invest $1.2 billion in AI and other technologies in the next four years. The company has about 2,700 employees in the Research Triangle.

 

North Carolina wins Forbes’ “Best State for Business”

North Carolina, Texas, Utah, Nebraska and Virginia made the top five in Forbes’ annual best states for business report. Rounding out the top 10 were Georgia, Florida, Colorado, North Dakota and Indiana.

 

No measurable gain in Kentucky, U.S. coal jobs

Kentucky’s economy is so much more than coal. Yet, the perception is the mining industry in Kentucky is critical to the Commonwealth’s economy. It’s important, but not critical. Employment in coal mining in Kentucky totals just over 9,000 workers. Ford employs more than that in Louisville
alone. Kentucky’s largest export is actually products from the aerospace industry. Yet, almost a year into the Trump Administration, the “Trump digs coal” campaign slogan isn’t gaining any traction. There were more coal miners on the job in Kentucky from July through September 2017 than in the same period in 2016, however, the industry saw job cuts of 350 workers in the last quarter. According to Bureau of Labor Statistics data, there are about 50,000 coal mining jobs left in the U.S., and that number has stabilized this year, but hasn’t increased measurably. Industry experts expect the number to fall slowly over the next three years based on lower demand as more electric power plants convert to natural gas and other coal plants are closed. A proliferation of natural gas and its position over coal as an energy source is the primary reason coal jobs have decreased in the U.S. from a high of 180,000 in 1985 to 50,000 today. 

 

Fed President: Immigration, trade not to blame for job losses

Dallas Federal Reserve President Robert Kaplan said in the fall quarter that if your job is being disrupted, don’t blame it on trade with Mexico or immigrants. In a speech to the Texas Business Leadership Council in October, Kaplan said, “A lot of the job dislocations are being publicly blamed on trade and immigration.” He said that could have been the case 15 years ago, but not today. “More than likely, if your job is being disrupted, it’s because of technology,” Kaplan said.

 

Best cities for tech jobs

In the fall quarter, NerdWallet came out with its 10 best cities for tech jobs. Of course, San Jose came in first, but Huntsville, Ala., was a strong second. Making the top 10 from the South were Durham-Chapel Hill, N.C.; Raleigh; Washington, D.C.-Northern Virginia and Austin. 

 

Alabama’s jobless rate in October was the lowest ever

The unemployment rate in Alabama dropped from 3.8 percent in September to 3.6 percent in October. The 3.6 percent is the lowest unemployment rate in the history of the state.

 

Cities with the highest percent of college graduates

According to Bizjournals.com, Washington, D.C., has the highest percentage of residents with bachelor’s degrees or higher — 50.2 percent. San Jose is in second place with 50.1 percent, followed by San Francisco, Raleigh, Durham, Boston, Madison (Wisconsin), Stamford (Connecticut), Austin and Denver.

 

South dominates Forbes’ “10 Best Cities for Future Job Growth”

In the fall quarter, Forbes came out with its 10 best cities for future job growth, and Myrtle Beach, S.C., took the top spot. Following Myrtle Beach in the South were Orlando; North Port, Fla.; Jacksonville, Fla.; Ocala, Fla.; Raleigh and McAllen, Texas. Las Vegas, Reno and Provo, Utah made up the top 10.

 

Haynesville Shale bringing jobs back to Northwest Louisiana

Natural Gas production in Northwest Louisiana will see an up-tick in jobs due to a familiar source — the Haynesville Shale. An economic and policy research group with LSU predicts over 2,800 jobs will be created in the Shreveport region over the next two years.

 

Chinese company investing billions in West Virginia

China Energy Investment Corporation announced plans to invest over $80 billion in shale gas development and chemical operations at multiple locations in West Virginia. Planning for the projects is underway and will be done in phases over the next 20 years, according to the West Virginia Department of Commerce.

 

In October, Tennessee’s unemployment rate was the lowest in the South

The unemployment rate in Tennessee in October was historically low at 3 percent after employers across the state added 34,800 jobs in the last 12 months. The rate was the lowest of all states in the South.

 

Austin, Nashville are completely out of labor

In October, the Austin MSA’s unemployment rate dipped from 2.9 percent to 2.6 percent. That rate is beyond full employment. But it didn’t beat Nashville’s unemployment rate for October. Nashville’s dropped to 2.3 percent, and several companies that have launched new job-generating projects in the Nashville region over the last couple of years are upset with some local officials who assured the companies that the region is flush with skilled talent. Metro Nashville’s 2.3 percent unemployment rate in October was the lowest of any large metro area in the nation.

 

A different Amazon project could bring 15,000 jobs to Northern Kentucky

Everyone is talking about the $5 billion Amazon HQ2 project that could create 50,000 jobs for some lucky state and city (or unlucky city, depending on who you talk to). But there is one Amazon project that is just getting off the ground at the Cincinnati/Northern Kentucky International Airport, which is actually located in Kentucky. It is Amazon’s new Prime Air hub, which was announced in January. Amazon announced then that it would invest $1.5 billion to build the Amazon Prime Air hub in Hebron, Ky., and that the deal will create 2,700 jobs. However, Louisville is home to the UPS Worldport, and that facility houses well over 20,000 employees. FedEx’s main hub is in Memphis and it, on any given night, has over 12,000 employees. Considering Amazon’s growth and the fact that it is at the forefront of drone delivery, just how many jobs will be created in Northern Kentucky for Amazon’s first world air freight hub?

 

Facebook will invest $1 billion in Virginia

Virginia Governor Terry McAuliffe has announced that Facebook is set to invest over $1 billion in the state. The tech giant will invest $750 million to construct a 970,000-square-foot data center in Henrico County. In addition, it will spend hundreds of millions building “multiple solar facilities” to power the data center with renewable energy. The project will bring thousands of construction jobs to the region and more than 100 full-time operational jobs.

 

If built, Airbus-Bombardier project expected to create about 2,000 jobs in Alabama

The partnership of Airbus-Bombardier to build C Series jetliners is expected to create 500 direct jobs at Airbus’ assembly plant in Mobile, Ala. The project will also create 550 to 700 supplier jobs and an additional 1,000 to 1,250 indirect jobs. The investment to reconfigure a new line at the Mobile plant is expected to top $300 million. However, the project is wrapped up in a trade dispute with Boeing. Boeing has filed the dispute with the U.S. Department of Commerce’s International Trade Administration.

 

Amazon’s Jeff Bezos opens a massive wind farm in Texas

Amazon has announced that its largest wind farm to date is operational. Amazon Wind Farm Texas will add over 1 million megawatt hours of clean energy to the grid annually. The facility, which is located in Scurry County, has over 100 turbines, each standing more than 300 feet tall with rotor diameters that are more than double the wingspan of a Boeing 787.

 

Briggs & Stratton reshoring production from Japan to the South

The manufacturer of small engines, Briggs & Stratton, is moving production of its V-Twin Vanguard engines from Japan to existing facilities in Statesboro, Ga., and Auburn, Ala. The Statesboro facility will see $18 million invested, while the Auburn facility will get $12 million, and each plant will see the creation of 50 new jobs.

 

LyondellBasell plans $2 billion project along Gulf Coast

LyondellBasell said it’s planning to build a multi-billion-dollar chemicals and plastics plant along the Gulf Coast, and very possibly in the Houston area, although a final decision may still be a year away. LyondellBasell CEO Bob Patel said the project would cost more than $2 billion and use propane to make chemicals and plastic polypropylene to serve American markets.

 

Texas oil companies have hired 30,000 workers this year

Texas drillers have hired more than 30,000 workers over the last year, bringing employment in that sector in the state to 222,000 as of October. At the peak of the oil boom in 2014, Texas had nearly 300,000 people working in the oil fields.

 

How many people do Japanese companies employ in the U.S.?

President Trump ruffled some feathers when he said during a visit to Tokyo in the fall quarter, “Try building your cars in the United States instead of shipping them over.” Well, they do. Six of the 19 automotive assembly plants in the Southern Auto Corridor are Japanese-owned — Toyota, Nissan and Honda. A quick fact check shows that Japanese companies employ more than 850,000 people in the U.S. (almost all of them are American citizens). And the Japanese pay well, too, more than U.S.-based companies on average and more than any country other than Germany in the U.S.

 

Deals at Deadline

Bosch Group is investing $152 million in an expansion in Anderson, S.C. The company, which will hire 130, makes electric components for the automotive industry at the plant. German auto supplier SAS Automotive Systems, an automotive module assembler, is launching an operation that will support Mercedes-Benz and its plant in Tuscaloosa, Ala. The project will create 170 jobs. Appriss, which provides data and analytics services to clients to assess safety, risk and compliance issues, is expanding in the Louisville area. The company is investing $11.3 million and adding 200 jobs. Korean auto supplier, Guyoung Tech USA, plans to employ 130 people at a second North American plant in Montgomery, Ala. The project represents an investment of $7.5 million and the company will supply the local Hyundai assembly plant. Cardone Industries is opening a new automotive parts distribution center in Harlingen, Texas. The deal will create 515 jobs. Through a purchase agreement with Walmart and its Made in America program, PRADCO Outdoor Brands is expanding its plant in Fort Smith, Ark. The company will install four soft plastics machines to produce YUM baits at the Fort Smith facility. The project will create 60 new jobs.