2015: Record year for foreign direct investment

After a poor 2014 with only $171.6 billion invested directly by foreign companies in the U.S., 2015 was a record year. In 2015, the U.S. saw more than $421 billion in FDI, by far the largest ever. Most of the investment came from Europe; however there is a growing trend with fast-growing Chinese investment. Just 10 years ago, Chinese investment in the U.S. was a mere $200 million. Last year, it was $15 billion and some are predicting it will top $30 billion this year. The Chinese are on track to do it. In the first two quarters of this year, the Chinese invested more than $18 billion in the U.S. in real estate, corporate acquisitions and greenfield projects, according to the Rhodium Group. According to the U.S. Department of Commerce, nearly 70 percent of foreign investment in the U.S. in 2015 flowed to the manufacturing sector.

 

Corporate inversions account for 20 percent of record foreign direct investment in the U.S.

Corporate inversions, where a U.S. company takes a foreign address typically by merging or being acquired by a small foreign company to lower its taxes, made up about 20 percent of the record $421 billion in foreign direct investment in the U.S. in calendar year 2015. In addition to the inversions, a record number of acquisitions were recorded in 2015 as foreign firms snapped up American companies in a sign that the U.S. economy is currently the world’s safest haven for foreign money. The $421 billion was a 68 percent jump from the prior year. Ireland, with $176.5 billion in investments in the U.S., was the No. 1 source of foreign direct investment last year.

 

Tennessee No. 1 in foreign direct investment jobs last year

According to the 2016 IBM Global Location Trends report that came out this summer, Tennessee was No. 1 for job creation from foreign direct investment in calendar year 2015. It was the second time in three years Tennessee has earned the honor. In 2015, Tennessee captured 43 foreign job generating projects that announced totals of 7,880 jobs and $2.2 billion in capital investment.

 

Bloomberg: “Go South, Young Folk: High-Tech Graduate Jobs Await You in Dixie”

That was Bloomberg’s title of an article that suggests job growth for graduates in science, technology, engineering and mathematics (STEM) is rising much faster in the Deep South than in Seattle, San Francisco or any other place outside the South. The article based its findings on a recent Brookings Institution report that “Dixie is where it’s at” for tech job growth. The article published a chart that showed job growth in advanced industries — Nashville topped the list, followed by San Francisco, Jackson, Miss., Fort Myers-Cape Coral, Fla., Kansas City, Raleigh and Charlotte, with Memphis rounding out the out the top eight. The high concentration of high tech automotive jobs is partly responsible for the rise in STEM jobs in the South, the Brookings study showed. According to the study, Tennessee ranked No. 1 in job growth in advanced industry jobs and Georgia was No. 2.  

 

South dominates fastest growing cities for financial services job growth

Tampa Bay (15), Raleigh (13), Miami (10), Richmond (9), Louisville (8), San Antonio (7), Charlotte (5), Austin (4), Dallas (2) and Nashville (1) all made Forbes magazine’s ranking of the cities in the U.S. creating the most financial services jobs.

 

Huge surge of Chinese coming to U.S. to work for companies they’ve acquired

We have written about the large increase in Chinese acquisitions of U.S. companies, as well as the rise in new Chinese greenfield projects going up in the South. In 2010, the Chinese spent just $4.6 billion in the U.S. on new and expanded projects, as well as acquisitions. That figure has risen to over $18 billion in the first two quarters of this year. This dramatically higher interest in the U.S. by the Chinese is creating another sector that is spiking. The number of Chinese expat executives working in the U.S. has risen significantly. It is a direct result of the incredible rise in Chinese companies acquiring U.S. companies. In 2015, the U.S. granted 10,258 L-series visas to Chinese executives and their family members. That is four times the number of Chinese executives that were approved for the visas in 2014. The L-1 allows companies with U.S. and foreign operations to move staff and their families to America.

 

Longest ever economic recovery not that far-fetched

The recovery from the Great Recession is now 86 months old. The record was in the 1990s when the nation’s economic expansion lasted 120 months. To beat that record, the economy must expand until June 2019, which, by the way things are looking, is not that far-fetched. Manufacturing set off this expansion in mid-2009, and now services or consumerism is taking hold in the U.S. economy. Historically, it is rare when services and manufacturing are expanding at the same time, but that is exactly what we are seeing today in America. Business and professional services are thriving as is the tech sector. With low cost and abundant energy, manufacturing will continue to thrive as the “make where you sell it” trend truly sets in. Combined with low interest rates and wages just beginning to inflate across all sectors, this recovery looks as if it is in its early stages.

 

Aerospace industry growing quickly in South Carolina

A study done by the University of South Carolina shows that aerospace-related employment in the Palmetto State is growing by an average of 11.8 percent annually, seven times faster than the state’s 1.6 percent annual growth. Anchored by Boeing’s 787 campus in North Charleston, and counting both military and private, about 100,000 jobs are in aerospace in South Carolina. The industry had a $19 billion annual economic impact on the state last year.

 

First LNG ship sails through expanded Panama Canal

The first liquefied natural gas tanker ship went through the newly expanded Panama Canal in the summer quarter. The ship was carrying LNG loaded at Cheniere Energy’s new multi-billion-dollar  Southwest Louisiana liquefaction terminal. Cheniere is the first company to export LNG in the lower 48 states. Several other terminals are now being built in Texas and Louisiana. After those are completed, the U.S. will be one of the world’s top LNG exporters.

 

Arkansas’ economy ranked No. 1 in nation

In the first quarter of 2016, Arkansas’ economy grew at 3.9 percent — more than any other state — compared to the last quarter of 2015, according to the Bureau of Economic Analysis. State officials cited a growing forestry industry as one of the factors behind the growth in Arkansas’ economy in the first quarter.

 

Billion dollar Chinese paper mill delayed

A $1.3 billion super paper mill project in Clark County, Ark., has been delayed for at least six months. Sun Paper Industry of China planned on starting construction in early 2017. Holding up the project are some pre-engineering and feasibility studies still to be done.

 

Virginia’s unemployment rate lowest in the South; region matches U.S. rate

Inching a two-tenths of a percent lower than Arkansas’ 3.9 percent unemployment rate in July, at 3.7 percent Virginia’s unemployment rate was the lowest in the South. For the first time since the end of the recession, the South’s unemployment rate matched the U.S. rate of 4.9 percent in July.

 

Tennessee below full employment

Tennessee saw its unemployment rate to fall to 4.3 percent in July. Economists set Tennessee’s full employment rate at 5.0 percent.

 

U.S. close to energy independence

In 2005, the U.S. imported 65 percent of its daily oil demand, according to the U.S. Energy Information Administration. Shortly after 2006, widespread fracking began in this country and by 2010, the U.S. imported 55 percent of its daily oil demand. That dropped to 28 percent last year and a new Raymond James report showed the total imported oil to meet our needs by 2020 will only be 11 percent. The report also stated that by 2020, America would need no oil imports from Russia or the Middle East. It will be able to import 11 percent of its daily needs from Mexico and Canada.

 

PwC ranks top aerospace manufacturing states

PricewaterhouseCoopers released its top states for aerospace manufacturing and like everything else, including GDP, population, you name it, the South landed 40 percent of the ranking’s top 10. Arizona topped the ranking, but Florida (2), Georgia (4), Missouri (5) and Texas (7) made the top 10. Utah, Indiana, Michigan, Ohio and Washington also made the top 10.

 

South Carolina unemployment rate at 15-year low

South Carolina’s unemployment rate dropped to 5.2 percent in July from 5.6 percent in May. The July rate marks the lowest unemployment rate in the Palmetto State since July 2001.

 

South’s largest manufacturing state loses manufacturing jobs

With more than $250 billion in exports in 2015, Texas is far-and-away the South’s and the nation’s largest state exporter. Yet, as a result of the oil and gas industry meltdown, Texas lost 7,379 manufacturing jobs from May 2015 to May 2016. It was the first time since the recession that Texas lost manufacturing jobs from any year-to-year period.

 

Florida’s gross state product to top $1 trillion by 2018

University of Central Florida economist Sean Snaith’s latest Florida & Metro Forecast showed that Florida’s economy is projected to grow by 2.9 percent through 2019, out-pacing the estimated 2.3 percent GDP growth by the U.S. Furthermore, the forecast noted that Florida’s gross state product will top $1 trillion for the first time by 2018.

 

Georgia’s manufacturing jobs rise for sixth straight year

According to the Georgia Manufacturers Register, manufacturers in Georgia added 2,188 new jobs between May 2015 and May 2016. It was the sixth consecutive year Georgia added manufacturing jobs after more than two decades of manufacturing job losses. Since May 2010, Georgia has added 23,399 jobs in manufacturing.

 

Manpower survey predicts metro hiring

The Q3 U.S. Manpower Employment Outlook Survey showed that Albany, N.Y., with 34 percent of executives surveyed, is the top market in the U.S. for positive net employment in the third quarter of this year. Richmond, Va., was second, followed by Charleston, S.C., Salt Lake City and Grand Rapids, Mich. The oil industry’s struggles put three Southern markets in the bottom five in employment outlook in Q3 — Oklahoma City, Baton Rouge and New Orleans.

 

North Carolina’s life science jobs at all-time high

North Carolina’s life science jobs are growing at three times the national average. Job growth in biotechnology grew by 2.2 percent in the U.S. from 2012 to 2014, according to the TEConomy. But in North Carolina, jobs in the sector grew by 6.6 percent in those years. Currently, the total number of people working in the life sciences in North Carolina is just above 70,000, setting a new record.

 

The South lands 12 cities on CNBC’s “Top 20 Metro Areas to Start a Business in America”

Atlanta, (17), El Paso (16), Sarasota (15), Raleigh (14), McAllen, Texas (12), Richmond (11), San Antonio (10), Dallas (8), Houston (6), Charlotte (5), Washington, D.C. (3), and Austin (1) all made CNBC’s “Top 20 Metro Areas to Start a Business in America.” The ranking came out in the summer quarter.

 

South places three in top five of entrepreneurship index

The 2016 Kauffman Index of Entrepreneurship Growth named Washington, D.C. as the No. 1 market in the U.S. for startup and entrepreneurship growth. Following D.C. were Austin, San Jose, Columbus (Ohio) and Nashville. Making the top 10 were also San Antonio and Dallas-Fort Worth.

 

Huge deal for downtown Memphis

Memphis-based ServiceMaster, the city’s fourth-largest public company, announced in the summer it would relocate its headquarters and 1,200 employees from East Memphis to the long vacant Peabody Place mall in downtown Memphis. The project is one of the largest in three decades for downtown Memphis.

 

Website names its top 15 U.S. destinations

Worth.com editors ranked the 15 most dynamics cities in the U.S. and called it “Worth Destinations 2016.” The ranking was based on measures of sustainability, cultural offerings, entrepreneurial environment, business climate, quality of life and civic leadership. Making the top 15 in the South were Atlanta, Charleston, Dallas-Fort Worth, Kansas City, Nashville, New Orleans and Orlando.

 

New GE Aviation facilities in Alabama

General Electric Aviation broke ground in the summer on two Huntsville facilities that will work together unlike anywhere else in the world. The company is investing $200 million in one facility that will mass produce silicon carbide materials used to produce ceramic composite components for jet engines. The other facility will turn the material into tape for ceramic components. When completed, it will be the first time the two processes will be produced in the same location.

 

University of Alabama is the nation’s fastest growing flagship school

According to research done by The Washington Post, the University of Alabama in Tuscaloosa is the fastest growing major university in America. With a growth rate of 92 percent since 2000, Alabama has passed other expanding SEC schools such as Florida and LSU. And for the first time ever, out-of-state enrollment comprises more than half of the student body at the university.

 

Orlando leads Florida in job generation

The Orlando metro led all Florida metros in jobs created from July 1, 2015 to July 1 of this year. Orlando added 51,600 jobs, followed by Tampa-St. Pete with 43,400. Third place was Fort Lauderdale with 35,900 jobs.

 

Georgia Ports Authority to build new terminal

The GPA will invest $19 million to construct the Appalachian Regional Port in Chatsworth, Ga. CSX is making off-site improvements to build the inland port.

 

Montgomery: Alabama’s “best-run city”

The website WalletHub recently ranked America’s “best-run” cities, and in Alabama, Montgomery was No. 1. Nationally, Montgomery came in at No. 51 overall.

 

Lake Charles and Baton Rouge escape oil collapse

Up until the oil and gas industry collapsed, Louisiana’s economy was doing very well, winning or sharing “State of the Year” from this publication six times from 2009 to 2016. Louisiana has lost more than 12,000 jobs in the last year, a time when job growth in the South has been astounding. It indicates how crucial the petroleum industry is to the state. But there is a job generating oasis in Louisiana and that is Lake Charles. In that market, a healthy 3,200 new jobs have been created over the past year, which does not include some of the surrounding areas like Cameron Parish, where billions in LNG export plants are planned, and the first in the lower 48 states is now operating in Cheniere Energy. In Baton Rouge, the capital city continued its six-year job gains streak. From June 2015 to June 2016, Baton Rouge added 11,300 jobs. As of July, Baton Rouge has the highest number of employed in non-farm jobs in history at 414,600.

 

Louisiana is No. 1 for low business costs.

According to a study released in the summer by KPMG, Louisiana maintains the lowest business costs in the U.S. The study compared business costs in 100 U.S. cities to come up with the ranking.

 

The final tab for the BP oil spill?

BP announced in July the final cost for the 2010 oil spill off the coast of Louisiana and Mississippi was $61.6 billion. Officials with the British company said that the last major expense related to the Gulf of Mexico oil disaster was paid earlier this year.

 

Midland-Odessa CSA led nation in population growth

The Midland-Odessa combined statistical area grew by 17 percent from 2010 to 2015, the fastest growth rate of any metro in the U.S. in that time frame. The CSA saw 47,347 residents added, bringing the population up to 326,115.

 

Two-year college enrollment surges in Tennessee

With the passage of the Tennessee Promise in 2014, Tennessee has seen its two-year college enrollment surge to unprecedented levels. The program essentially makes technical college free of charge in the state. For the first time in history for many counties in the state, more students are enrolled in two-year colleges than four-year schools.

 

Nashville has less available office space than any other major market

The Nashville boom times have placed the city in a tough spot. There is less office space to rent in Nashville than any other U.S. market, according to Cushman and Wakefield. There was just 5.5 percent of all office space in Nashville available for rent as of the end of July. At the same time, Nashville has more office space under construction than any other city in the U.S.

 

Memphis industrial leasing setting records

New and renewed industrial space leases filled 8.7 million square feet of space in the Memphis area in the first half of 2016. That’s a 31 percent increase in leasing activity from the first half of 2015. Class A space accounted for 6.2 million square feet. The record for Class A space leases in Memphis — a huge distribution market with FedEx’s world hub located there — was set last year at 6.8 million square feet. That total will be surpassed in Memphis by the time this is read.

 

Austin industrial properties “full up”

According to Jerry Heare, SVP of REOC Austin, the Austin industrial real estate market is “full up.” Heare was quoted in an Austin Business Journal article, saying, “The market is the tightest it’s been in our 30-year history of tracking local industrial lease space.” Overall in Austin, vacancy for warehouse and flex space stands at 4.8 percent as of July.

 

CNBC names Austin No. 1 to launch a startup

In the summer, Austin was named the best place in the U.S. to launch a startup by CNBC. Provo, Utah was No. 2, followed by Washington, D.C., Denver, Charlotte and Houston. San Francisco and New York City failed to make the top 20.

 

Louisiana governor signs executive order on property tax breaks for industry

Gov. John Bel Edwards signed an executive order in the summer that will place more scrutiny over how industrial property tax breaks are doled out to manufacturers. Local governments — both parish and city — will now be involved in approving tax exemptions for new and expanding industry. Companies applying for 10-year property tax breaks will also have to verify the number of jobs and investment in each project. According to the nonprofit Together Louisiana, approved property tax breaks for industry total $16.7 billion in lost property taxes to local governments.

 

$1.5 billion Louisiana port one step closer to reality

In the summer quarter, a proposed $1.5 billion deep-water port in Cameron Parish, La., received approval to issue bonds to finance the project. Port Cameron, if built, is situated on 500 acres on the Calcasieu Ship Channel that serves the Port of Lake Charles.

 

Kentucky’s high school graduation rate at 87.5 percent

Kentucky’s high school graduation rate is among the highest in the country, according to the Johns Hopkins School of Education and Civic Enterprises. The Commonwealth is one of just six states that have a higher grad rate for low-income students above the national average, which is 82.3 percent. Kentucky’s grad rate for low-income students was 84 percent in 2014.

 

Record investments in TVA territory

The Tennessee Valley Authority is on a record-breaking investment pace in its seven-state region. Since 2006, TVA has helped attract more than 500,000 jobs and $60 billion in investment. But this fiscal year is shaping up as a record-breaking one. Already this year, over $7 billion has been invested by companies in TVA’s territory.

 

Charleston, S.C., named “best city in the world”

In the summer quarter, Charleston was named by Travel + Leisure magazine as the “best city in the world.” The only other U.S. markets making the top 10 were Savannah (ninth) and New Orleans placed seventh.

 

Employment up to 6,000 at Georgia’s Plant Vogtle

Construction worker employment at one of the largest construction sites in the U.S. has now passed 6,000. Co-owner Georgia Power is building two nuclear reactors in East Georgia that will be completed in 2019 and 2020. The project, set on a 3,100-acre site, is more than one-third complete.

 

One company has given out $1 billion in work to small businesses in Huntsville, Ala.

Defense giant and Virginia-based Northrop Grumman recently sub-contracted about $1 billion worth of work on the nation’s ballistic missile system to small businesses in the Huntsville area. Northrop Grumman is the fifth largest defense company in the world.

 

North Texas real estate has never been hotter

There are so many companies relocating their headquarters to the Dallas-Fort Worth metro that the residential real estate sector has never been more active. The largest such relocation is happening now with Toyota’s headquarter relocation to West Plano, Texas from Southern California. Toyota employees are finding the move delightful. One relocating Toyota employee said in an interview that he can buy two very nice houses in the Dallas-Fort Worth region for the price of a not-so-nice house in the Los Angeles area. That’s essentially Toyota giving employees a raise without having to pay a dime. Also, there is an 8 percent state tax in California but no state tax in Texas, giving relocating companies another way to give raises to employees by relocating to Texas.

 

North Texas No. 1 in commercial real estate construction

The Dallas-Fort Worth region currently has more commercial real estate under construction than any other U.S. metro. There is almost $10.7 billion of construction in the commercial real estate sector in the Dallas-Fort Worth metro.