Fed official: “We’re basically at full employment”
In the spring quarter, San Francisco Federal Reserve President John Williams said that “we’re basically at full employment.” Williams also said there is a lot to be happy about regarding the current economy, citing growth of about 2 percent a year, an unemployment rate that has been cut in half since the recession and the nation averaging about 200,000 new jobs a month for the past two years.
The bleeding of manufacturing jobs to China has stopped
From the time China joined the WTO in 2001 to 2010, it has been estimated that about 2 million manufacturing jobs offshored to the country from the U.S. That’s an average of almost 200,000 good-paying manufacturing jobs lost in the U.S. each year and an estimated 90,000 jobs lost each year in the South.
But in 2010, offshore moves by manufacturers began to slow as the U.S. became more competitive as a result mainly of rising Chinese wages and lower energy costs here in the U.S. That is when the word “reshoring” was invented and the South and the U.S. have been adding manufacturing jobs almost every year since. In fact, nearly 1 million manufacturing jobs have been added in the U.S. since 2010.
While offshoring is an issue in this presidential campaign, it really shouldn’t be. According to the Reshoring Initiative, today there is a breakeven score between offshoring and reshoring of jobs in this country. In 2015, there were about 60,000 manufacturing jobs offshored to China, but about 67,000 manufacturing jobs were reshored to the U.S.
Deloitte: U.S. expected to pass China in manufacturing competitiveness by 2020
Supporting another study comparing how competitive the U.S. and China are in the manufacturing sector, Deloitte’s 2016 Global Manufacturing Competitiveness Index showed that U.S. manufacturing competitiveness has risen to No. 2 in the world, with China remaining at No. 1. But like a similar study put out by the Boston Consulting Group last year, Deloitte expects the U.S. to surpass China as the most competitive manufacturing country by 2020. Like the BCG report, Deloitte interviewed more than 500 senior executives at global manufacturing companies.
The most important political-economic news of the millennium?
According to the International Energy Agency, for the second consecutive year, global GDP grew and global carbon emissions leveled off. It was the first time in 40 years that carbon emissions did not rise when global GDP increased. Here in the U.S., GDP has grown by 28 percent since 2000, while its carbon emissions have decreased 6 percent. About the severing of the historic link between rising emissions and a growing economy, Robinson Meyer wrote in The Atlantic, “. . .it seems no exaggeration to call this the most important political-economy news this millennium.”
Chinese investment in the U.S. to set record this year
After investing a record $15 billion in the U.S. last year, the Rhodium Group and the National Committee on U.S.-China Relations reported in the spring quarter that Chinese investments are likely to total between $20 billion and $30 billion this year. If the $30 billion mark is reached, it would mean China would be one of the largest foreign direct investment nations in the U.S., joining countries like Japan, The Netherlands and the U.K. Just five years ago, Chinese investments in the U.S. were virtually nonexistent. Most of the investments in the U.S. are acquisitions, therefore politicians and regulators are increasing their inspections of the deals.
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 none of those years are shaping up like this fiscal year. Already this year, nearly $7 billion has been invested by companies in TVA’s territory.
People flocking to Southern major markets
According to Realtor.com, eight of the top 10 inbound migration cities in the U.S. are located in the South. The No. 1 city was Tampa, followed by Jacksonville, Charlotte, San Antonio, Austin, Las Vegas, Orlando, Nashville, Raleigh and Portland.
What? Sarasota County votes not to accept relocating HQ
You know the economy is good when communities begin to reject prospective projects. That’s exactly what Sarasota County, Fla., did in the spring quarter. The County Commission voted four-to-one in May against offering $720,000 in incentives for a national roofing company to relocate its headquarters to Sarasota. About 20 local contractors and professional associations also spoke out against the project. They argued that the new company would make it more difficult for local companies to retain key employees. The unemployment rate in Sarasota is 4.2 percent.
Largest Chinese greenfield investment to open by end of the year in Corpus Christi
By the end of this year, the largest Chinese greenfield investment in the U.S. will be operational. The $1.3 billion Tianjin Pipe (TPCO) facility near Corpus Christi will produce seamless pipe for the energy industry. Much of the pipe will be used at the nearby Eagle Ford Shale formation in South Texas. The project is expected to create 600 jobs.
Georgia and South Carolina moving ahead with shared port
The Georgia Ports Authority approved $7.5 million to conduct an environmental assessment for a proposed $5 billion Jasper Ocean Terminal, a new port near the Georgia and South Carolina border. South Carolina officials have already funded their part of the environmental work. The new port will be shared by the two states and will include 10 berths on 1,500 acres in Jasper County, S.C. The project is expected to open in 2030.
Construction begins in November for new $1.5 billion Louisiana port
Construction on the first phase of Port Cameron on the Calcasieu Ship Channel south of Lake Charles will begin later this year. The $1.5 billion project, when fully leased, will generate about $2.8 billion in sales and create 10,000 jobs. The four-year build-out phase will create about 16,000 construction jobs.
Nashville metro county has largest job growth in U.S.
Williamson County, Tenn., saw the largest job growth in the country from September 2014 to September 2015, according to a recent report from the Bureau of Labor Statistics. Job growth during that period grew by 6.8 percent, more than any other large metro county in the U.S. The 6.8 percent job growth in Williamson County was more than three times higher than the national average of 1.9 percent.
Memphis industrial real estate market soaring
Because of the FedEx hub in Memphis, the city’s industrial market is a good barometer of the economy. In 2015, the Memphis MSA’s industrial real estate sector saw a record-breaking year with an absorption rate of 8.4 million square feet. The market continued to soar in the first three months of this year, with 4 million square feet of newly leased space.
South lands six states on Chief Executive’s “Best States for Business” top 10
Once again Texas was Chief Executive’s 2016 “Best State for Business.” Texas was followed by Florida, North Carolina, Tennessee, Indiana, Arizona, South Carolina, Georgia, Nevada and Ohio in the top 10. The bottom five were Connecticut, New Jersey, Illinois, New York and California.
TVA achieves nuclear reaction at Watts Bar
The Tennessee Valley Authority’s Watts Bar Unit 2 achieved its first sustained nuclear fission reaction in May and is now operating. The plant, which is located in Spring City, Tenn., will eventually provide up to 1,150 megawatts of electricity — enough to power 1.3 million homes.
Nashville has a ridiculous number of jobs available
We all know there are over 5 million jobs available and unfilled in this country. Of those, there are about 1 million tech-based jobs available right now. As of late May, there were nearly 100,000 jobs available and unfilled in the Nashville metro.
Airbus delivers first Alabama-built jetliner
The first airplane built in Mobile, Ala., by Airbus was delivered to Jet Blue in the spring quarter. Airbus is also ramping up employment at the plant. The company expects to build four to five aircraft a month once this second round of hiring is completed and the workers are trained. The $600 million assembly plant will eventually house 1,000 workers.
Two Georgia megasites gain certification
Two large sites in middle Georgia gained certification by the state in the spring quarter. The Heart of Georgia Megasite in Laurens County near Dublin features 2,000 acres and is located on Interstate 16. The other is the Sibley-Smith Industrial Park on the U.S. 441 bypass in Baldwin County, Ga., which consists of 1,657 acres. Both sites have rail access.
North Carolina megasite moving toward certification
The financial supporters of the Greensboro-Randolph Megasite near Liberty, N.C., are moving ahead with several infrastructure projects on and near the 1,400-acre site. The Greensboro-Randolph Megasite Foundation, part of the Joseph M. Bryan Foundation, has signed a contract with Duke Energy to bring power to the site. The Foundation has also signed a contract with a preconstruction firm based in Charlotte to design a large interchange at the site to connect with U.S. 421. In the spring, North Carolina Railroad closed on 800 acres to complete the megasite.
Florida Gov. Rick Scott takes job poaching trip to California; Miami Beach mayor counters
Gov. Rick Scott took another recruiting trip to California in the spring quarter, provoking California Gov. Jerry Brown again. Scott’s message to California execs was the usual sales pitch; lower taxes and wages in Florida compared to California. Scott claimed that Brown had hurt California’s business climate by boosting the minimum wage to $15 an hour in the state by 2021. But after Scott’s trip, Miami Beach Mayor Philip Levine purchased radio ads in major California metros that stressed the positive value of minimum wage hikes, which he is trying to do in his city. The ads partly read: “I want the people of California to know that Miami Beach is about to vote on a historic measure; a living wage for all its residents, one that allows them to not only work here but live here.” Gov. Brown and Gov. Scott have been going at it recently as Scott tries to poach jobs from California. If you recall, former Texas Gov. Rick Perry took similar highly publicized recruiting trips to California a few years ago.
$20 billion Texas LNG export terminal has taken another step forward
The Woodlands, Texas-based NextDecade LLC filed its application with the Federal Energy Regulatory Commission in May. The company plans to build a 137-mile pipeline and an LNG export terminal at the Port of Brownsville. NextDecade is filing for permission to take natural gas mined from the Eagle Ford Shale region south of San Antonio and export it overseas to customers. The project, called Rio Grande LNG, is expected to cost $20 billion.
New Orleans is much less susceptible to flooding
New federal maps show that New Orleans is much less vulnerable to flooding than before Hurricane Katrina in 2005. It is so much less vulnerable that Mayor Mitch Landrieu said more than half of the city’s properties will see a large decrease in the cost of flood insurance. Army Corp of Engineers spent more than $14 billion improving the city’s defenses against flooding.
Cleveland, Tenn., leads nation in job growth in past year
Cleveland, Tenn., led the nation in the past year in the share of new jobs added from February 2015 to February 2016. The U.S. Bureau of Labor Statistics (BLS) said employment in metropolitan Cleveland jumped by 9.3 percent in the past 12 months, adding 4,968 jobs in the two-county area. Among the nation’s 387 metropolitan areas, no other city added a bigger share of new jobs, according to the BLS.
Wages are growing faster in big Southern cities
According to Headlight Data and the Bureau of Labor Statistics, of the top 10 large U.S. cities that saw the highest wage growth in 2015, seven are in the South. Columbus, Ohio led all cities in wage growth last year, but Virginia Beach (2), Jacksonville (4), Tampa (5), Raleigh (6), Orlando (8), Birmingham (9) and Charlotte (10) made the top 10.
Health care sector adding record number of jobs
Over the last year, the health care industry created 503,000 jobs in the U.S., a new record. The previous record was the year before when 486,000 health care jobs were created. Most of the hires were at hospitals, where 183,000 jobs were generated. And the added number of Obamacare patients has created jobs across the board, from physicians’ offices to hospitals to home health care.
Enterprise Florida’s downsizing
The economic development arm of the state of Florida is facing a major contraction of its budget. In the spring quarter, the Florida Legislature rejected Gov. Rick Scott’s $250 million budget for Enterprise Florida to recruit business to the state. Soon after that, Gov. Scott ordered the Enterprise Florida board to make $6 million in cuts to its staff and facility. At the time, the agency had 90 employees with a payroll of $9 million. Bill Johnson, the CEO of Enterprise Florida, immediately resigned. In numerous Florida newspapers, Scott said about the failure to fund the state’s economic development agency, “It will forever change the face of economic development in our state.”
DFW and Houston blow away all markets in population gains, in-migration
In the 1990s, markets in Florida such as Tampa Bay and Orlando were the destination of choice for migrants looking for better jobs. This decade, Texas markets undoubtedly have that cornered. According to the Census, Houston added 159,083 people from July 1, 2014 to July 1, 2015. Dallas-Fort Worth added 144,704 residents in the same period. Third-place Atlanta didn’t even get to six figures, adding 95,431 residents during that year. Here are the top 15 markets in the U.S. in population gains from July 2014 to July 2015:
U.S. Metro Leaders in Population Growth
Houston 159,083
Dallas-Fort Worth 144,704
Atlanta 95,431
Phoenix 87,998
New York 87,186
Los Angeles 85,671
Miami 75,231
Washington DC 63,793
Seattle 60,714
Orlando 60,409
San Francisco 60,152
Denver 58,474
Tampa-St. Pete 57,412
Austin 57,395
San Antonio 51,285
Source: Census
“Made in the USA” towels by Marriott
Soon, all Marriott hotels will feature USA-made towels and bathmats. Marriott has an agreement with Cincinnati-based Standard Textile to produce 2.6 million bath towels and 4.9 million hand towels annually. They will be made at plants in Thomaston, Ga., and Union, S.C., with 100 percent cotton fiber grown in the U.S. The contract will create 150 new jobs at the two plants. Previously, Marriott was purchasing towels from Jordan.
Feds approve offshore wind research facility off Virginia’s coast
The federal government has approved the construction of two 6-megawatt wind turbines 27 miles off the coast of Virginia Beach. The two turbines will act as a research facility to test the turbines in harsh open seas. If tests prove positive, wind farms could be developed off the coast of the Commonwealth.
DFW leads nation in office space demand
Dallas-Fort Worth led the nation in office absorption in the first quarter of 2016. It also had one of the nation’s largest increases in office rents. Over 2.2 million square feet of office space was leased in the first three months of the year. That was more than twice the amount of space leased in Denver, which placed second. Miami placed third.
Atlanta, Raleigh named top aging cities
Atlanta is the nation’s No. 1 rapidly aging city and Raleigh is second, according to Forbes. Atlanta’s senior citizen population jumped by 20 percent between 2010 and 2014. (The average was 11.3 percent among the 53 largest metros.) In the South, Jacksonville ranked 4th and Austin was 7th.
U.K. report says labor costs in U.S. only 4 percent higher than China’s
U.K.-based Oxford Economics recently published a report that showed that China’s effective labor costs are only slightly below labor costs in the U.S. Rising wages in China and higher worker productivity in the U.S. means that U.S. workers cost just 4 percent more than Chinese workers.
The number of American breweries has hit a record high
According to data released by the Brewers Association in the spring, there are now more U.S.-based breweries than at any point in American history. There are 4,269 operating breweries of all sizes as of the end of 2015. That beat the previous record for American breweries that was set in 1873 when a lack of refrigeration meant all breweries had to be local.
Cerner completes initial stage of 16,000-employee expansion
Electronic health records giant Cerner completed the initial stage of its $4.5 billion expansion in Kansas City, where it is headquartered. Construction is nearly complete on the first two buildings of the company’s new campus where 16,000 employees will eventually be housed.
Health sciences and technology innovation district to be built in Roanoke
Virginia Tech and Carillion Clinic plan to build a health sciences and technology innovation district in Roanoke, Va. The district is expected to grow into a medical hub with the focus on understanding and treating specific diseases. Virginia Tech partnered with Carillion, a private health care system, to create a research institute and medical school eight years ago.
Orlando’s job growth in 2015 was tops in the nation
With a 4.58 percent increase, Orlando led all U.S. metros in job growth in calendar year 2015 according to a revised Department of Labor report revealed in the spring quarter. San Jose, San Francisco, Tampa and Dallas-Fort Worth made up the top five.
Property purchased for $1.5 billion aluminum mill in Louisiana
Revolution Aluminum has purchased the former International Paper mill in Pineville, La. The startup company proposes to transform the old paper mill into a new aluminum mill. The $1.5 billion project is expected to employ more than 1,000 people.
Money Magazine names North Carolina town best place to live in U.S.
Money has named Apex, N.C., as the best place to live in the country. According to the publication, the Wake County town has all the amenities of a big city thanks to its proximity to Raleigh, while keeping its “small town charm.”
Longest streak of private section job growth now at six full years
The longest recorded run of monthly job growth in the U.S. now stands a full six years — 72 consecutive months — as of February 2016. During that time, 14.3 million jobs were added to the U.S. economy. And in those six years, the U.S. unemployment rate has been cut in half, roughly from 10 percent to 5 percent.
More South Carolinians are employed by foreign-owned companies than any other state
A report published by the Organization for International Investment showed that in 2013 — the latest figures available — over 127,000 workers in South Carolina got their paychecks from foreign-owned companies. In terms of percentage of the entire state workforce, the number represents the highest in the country. . .just over 8 percent of the state’s workforce.
Memphis, Fort Worth and Atlanta lead nation in growth of female-owned businesses
With a whopping 116 percent increase in the number of businesses owned by women — from 2007 to 2012 (latest figures available from the Census) — Memphis leads all U.S. metros in the category. Fort Worth is second with a growth rate of 78 percent, and Atlanta is third with 65 percent. Making the top 10 in the South were Houston, Dallas, Austin, Jacksonville and Charlotte.
Deals at deadline
China Jushi, a Chinese manufacturer of fiberglass products, is investing $300 million in a new plant in Richland County, S.C. The project will create 400 new jobs. Jacobs Engineering Group, a large engineering and design firm with 230 offices around the world, is relocating its headquarters to Dallas. The firm already has about 300 workers in Dallas. The company expected to relocate 100 top executives to Texas. Memphis-based FedEx has already hired 300 workers for a new distribution center in Louisville. The 300,000-square-foot facility will eventually house 700 employees.
Heritage Glass has sold its closed solar glass facility in Kingsport, Tenn. to EnviraGlass. The new company is reopening the plant and will initially employ 104 workers. thredUP, an online retailer of secondhand women’s and children’s clothing, is opening a warehouse in Gwinnett County, Ga. The project will create 300 jobs. Hol-Mac Corp., a manufacturer of oil field equipment and hydraulic cylinders, is expanding its facility in Bay Springs, Miss. The $5 million deal will create 40 new jobs. Hallmark Cards has hired about 345 full-time employees at its Liberty, Mo., distribution center. The company expects to hire 300 more workers at the center in the summer. Amazon is hiring 1,000 workers at its new 855,000-square-foot distribution center in San Marcos, Texas. Milwaukee Tool is expanding its plant in Greenwood, Miss. The company is adding 75 jobs and investing $1.5 million.
Embraer has begun assembly of its Legacy 450 and Legacy 500 private jets at its new Melbourne, Fla., facility. The project is generating 600 new jobs. California call center company Alorica is adding 400 employees at its center in San Antonio. ServiceMaster Global Holdings will relocate and retain its headquarters in Memphis. The company that is known for brands such as Terminix and Merry Maids will move its headquarters from East Memphis to the vacant downtown mall located next to The Peabody Hotel. More than 1,200 employees will relocate in the move. Pilgrim’s Pride is expanding its poultry plant in Graves County, Ky. The $24 million deal will create 140 jobs. Kinder Morgan has received federal approval for a $2 billion LNG export facility to be built in Savannah. Auto supplier Ficosa is hiring hundreds of workers at its new 270,000-square-foot plant in Cookeville, Tenn.
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