Around the South - Fall 2020

There is some good news in a turbulent quarter

West Virginia wins $500 million Virgin Hyperloop facility

Virgin Hyperloop said West Virginia will be the home of a $500 million certification center and testing track for its super high-speed travel system on nearly 800 acres of land across Tucker and Grant counties. Hyperloop’s goal is to move people and goods in pods through a vacuum tube at speeds exceeding 600 mph, enabling travel from Pittsburgh to Chicago in 41 minutes or New York City to Washington, D.C., in just 30 minutes. Virgin representatives estimate 150 to 200 engineering and technician jobs will be filled along with 13,000 local jobs in construction, manufacturing and maintenance.


“Shecession” Within family units, mothers have been three times more likely than fathers to lose or quit their jobs.Female recession
The pandemic has been particularly hard on women, especially women of color and women with young children. The gains in jobs and income for women in the longest recovery in the nation’s history — the 10 years from the last recession to this one — is historic. Yet today, the unemployment rate for women of color is above 10 percent and 7.3 percent for white women, according to the Labor Department. Many women have dropped out of the workforce to care for their children. In fact, mothers are three times more likely than fathers to have lost jobs during the pandemic, and mothers of 12-year-olds and younger lost about 2.2 million jobs from February to August. Because government budgets have been hammered by the pandemic, at least 640,000 teachers lost their jobs between February and August.

Hundreds of thousands of women leave the workforce
In September, over 865,000 women left the U.S. workforce. . .four times the number of men who left the workforce during the same month. With so many children tele-schooling, many parents — especially mothers — are forced to stay home as a result of the demands of child care.

Surveyed CFOs see strong 2021 economy
Deloitte surveyed CFOs in December about the economy in 2021. Nearly 70 percent of those surveyed said they predict the COVID-19 vaccine will help in a strong recovery beginning in the middle of 2021. Two-thirds said they expect strong consumer spending in 2021, and 63 percent believed business spending will spike.

Foreign direct investment (FDI) in the U.S. dropped dramatically in the first six months of 2020
Foreign direct investment in the U.S. fell 61 percent in the first half of 2020. In the first six months of the year, the U.S. attracted $51 billion, a far cry from years 2015 and 2016 when over $200 billion was invested by foreign companies in the first half of both those years. FDI dropped 29 percent in the European Union, according to United Nations’ Conference on Trade and Development, and FDI in China fell by just 4 percent in the same time period.

Fed’s Powell says without more stimuli, U.S. will have a weak recovery
In the fall quarter, Federal Reserve Chairman Jerome Powell said that without a significant stimulus bill, the country would face a weak recovery and risks “unnecessary hardship.” Powell also said that the recovery is “far from complete.”

COVID-19 response drives up record worldwide public debt
The International Monetary Fund said in October that recovery funding in response to the coronavirus by the world’s governments has driven public debt to record high levels. Governments around the world committed nearly $12 trillion as of the middle of September. The spending by all governments to fight the recession is nearing 100 percent of global GDP.

Fed official: Another year before economy returns to pre-pandemic levels
In the summer and fall, the economy rebounded strongly from the spring’s lockdown. However, in the fall quarter, Federal Reserve Vice Chair Richard Clarida told the American Bankers Association in October that it will be at least a year before the economy will return to pre-COVID levels, and most likely longer than that for the labor market to return.

New business applications set record
A study by LendingTree that came out in the fall quarter showed that the number of new business applications filed through mid-October in the U.S. surpassed the total from 2019. New business applications by mid-October were over 3.4 million.

Air Force narrows site list for Space Command to six states
The Air Force announced six possible states where the new Space Command will be located. In a statement, the Air Force said the command will be at one of these locations: Patrick Air Force Base in Florida, Kirtland Air Force Base in New Mexico, Offutt Air Force Base in Nebraska, Peterson Air Force Base in Colorado, Port San Antonio in Texas, or Redstone Army Airfield in Alabama.

Shown here is a rendering of the future flightline at Tyndall Air Force Base. . . nearly $3 billion in funding has been allocated to construct a digitally-connected, 21st century Air Force base.Northwest Florida’s Tyndall goes from destroyed to “Base of the Future”
In October 2018, Tyndall Air Force Base in Bay County, Fla., was almost totally destroyed by Hurricane Michael. Officials were talking about closing down the base. Now the Air Force has announced that the base will not close and will be rebuilt as the “Base of the Future.”

Over 8 million Americans have fallen into poverty
Even with unprecedented financial aid by federal and state governments, including the massive $2.3 trillion CARES Act, millions have fallen into poverty since May 2020. Federal aid now has long expired, and unless another package is approved by Congress, it is clear that there will be additions to the 8 million that have joined the poverty ranks.

Brookings finds a $2 trillion stimulus bill would bring economy back to pre-pandemic levels
The Brookings Institution reported in the fall quarter that a $2 trillion federal stimulus would bring the U.S. economy back to pre-pandemic levels by mid-2021. Brookings said the spending would raise gross domestic product by 4 percent in 2021 and 2022.

It will take years before the office market recovers
In the fall quarter, a report by Cushman & Wakefield showed it will take years for the office market to recover in the U.S. The report predicted that office occupancies will fall by 145 million square feet nationwide in 2020 and 2021 as a result of the pandemic. The economy so far has lost a net of 1.8 million office jobs. Data from Brivo, a company that provides access-control systems for offices, showed that in September, entries to office were down over 50 percent. That means about half of all offices in the country are empty.

U.S. is the richest country in the world, but has the biggest wealth gap
German insurer Allianz reported in the fall quarter that the United States led the world in growth of financial assets in 2019, but its distribution of wealth is the worst in the world. The report also claimed that for the first time since 2000, there was a decline in those in the middle class.

Airline industry revenues down 46 percent compared to 2019
Total revenues for the airline industry are expected to fall by 46 percent in 2020 according to the International Air Transport Association (IATA). Total revenue was $838 billion in 2019. The recovery of the industry has been delayed due to new COVID-19 outbreaks in the fall 2020 quarter. IATA expects 2020 air traffic to be down 66 percent from 2019.

Pandemic puts tons of sublease office space on the market in Dallas-Fort Worth
Tons of office space in Dallas-Fort Worth sits empty as up to 60 percent of workers in the fall quarter continue to work from home. With the pandemic and the recession, up to 8 million square feet of office space is actively being marketed as sublease space. There is also 5 million square feet of space is being built.

MSN designated Danville, Ky., as the “most beautiful small city” in the Commonwealth.Danville named Kentucky’s most beautiful small town
In the fall quarter, MSN designated Danville, Ky., as the “most beautiful small city” in the Commonwealth. Danville’s historic downtown district is thriving with shops, eateries and the arts. Danville was the birthplace of Kentucky in 1792.

Dallas-Fort Worth industrial building boom
The Dallas-Fort Worth region set a record for the first nine months of 2020 in industrial building leasing. Cushman & Wakefield reported that the DFW industrial market is currently tracking over 14 million square feet of active leases.

Fastest layoffs in history in oil and gas
The global pandemic is almost wholly responsible for 107,000 lost jobs in the U.S. oil and gas industry. A report by Deloitte revealed that about 7 percent of the 1.5 million employed in the oil, gas and petrochemical industries were laid off between March and August as demand for petroleum products fell as a result of COVID-19.

Hotel owners: Sixty-seven percent of properties in danger of foreclosure
In the fall, the American Hotel & Lodging Association reported in a poll of 1,000 hotel owners that 67 percent believe that their businesses can only last six more months without financial relief from the federal government. The same number of those polled said that roughly half of their hotel staff has been laid off. And without additional financial federal help, 74 percent reported they will have to lay off more employees or close down.

Elon Musk moves to Texas
Elon Musk, CEO of SpaceX and Tesla, has moved to Texas. Both SpaceX and Tesla maintain major operations in California, but Tesla is building a Cybertruck plant near the airport in Austin, Texas, that represents a $1.2 billion investment and will house 5,000 workers.

Manufacturing workers fell during Trump presidency
According to the Bureau of Economic Analysis, the number of manufacturing jobs fell sharply and outsourcing to other countries increased. Trump’s tariffs had no effect on outsourcing, but the pandemic may indeed have an effect on that economic factor. More than 250,000 jobs were outsourced overseas from 2016 to 2018. The Bureau of Economic Analysis shows that in the fall, a net total of about 59,000 jobs were outsourced to China by U.S. companies since the coronavirus appeared in February of 2020.

Construction to begin on Texas high-speed train
The high-speed train between Dallas and Houston is close to breaking ground after two decisions for a “go” by federal officials. Webuild Group and its U.S. subsidiary and joint venture partner Lane Construction are one step closer to construction.

GE to end building coal-fired power plants
General Electric, one of the world’s largest builders of coal-fired power plants, is getting out of the coal game, which would be a huge blow to miners of the fossil fuel. GE will continue servicing coal-fired power plants, but will shift to renewable and natural gas energy production.

Feds believe economy will improve in 2021
In October policy meetings, Federal Reserve officials stated that the economy will improve in 2021, and by the end of the year, the unemployment rate will be around 5.5 percent. That projection means that the Fed is now more optimistic about the economy in 2021 than they were this summer. By 2023, the Fed believes the unemployment rate will be at 4 percent, meaning back to pre-coronavirus levels. Officials also said that the economy remains uncertain because of the virus.

Census: Record low poverty rate before virus recession
According to the Census Bureau, there was a record low of Americans living in poverty prior to the pandemic recession. Census reported that families and individuals in poverty dropped to 10.5 percent at the end of 2019. Incomes climbed the entire year of 2019, according to the Census.

The final score for Trump’s trade wars
We have written many times that tariffs do one thing: less is sold and what is sold costs more. The Economic Policy Institute reported in the fall quarter that President Trump’s tariffs cost America manufacturing jobs and contributed to plant closures. The Institute’s research showed that nearly 1,800 U.S. factories closed between 2016 and 2018.

Fifteen million dollars in funding for oyster cultivation and wildlife restoration is headed to the Mississippi Gulf Coast.BP money to fund oyster habitat on the Mississippi Gulf Coast
Fifteen million dollars in funding for oyster cultivation and wildlife restoration is headed to the Mississippi Gulf Coast, more than a decade after the Deepwater Horizon oil spill damaged fisheries and habitats and ravaged the state’s seafood economy. The money will fund habitat management over thousands of acres at the Wolf River and Hancock County coastal preserves. Ten million dollars will be used to restore and create hundreds of acres of oyster beds, and another half million will go to an oyster gardening project.

Cruise industry to lose $32 billion in 2020
According to the Cruise Lines International Association, the cruise industry lost an estimated $32 billion in 2020. The suspension of cruise operations in the U.S. has meant the loss of over 250,000 jobs.

Florida passes $15 minimum wage
Florida voters in the fall quarter approved a ballot measure raising the minimum wage to $15 an hour. Florida is the first state in the South to raise its minimum wage to $15.

Austin, Dallas-Fort Worth top two in Tech Town Index
Dallas-Fort Worth jumped six other markets in CompTIA’s annual Tech Town Index ranking the strongest job center for technology jobs in the U.S. Austin ranked first. Others in the top 10 were Raleigh (3); San Jose; Charlotte; Seattle; San Francisco; Atlanta; Huntsville and Denver.

New job generation in Austin at record highs
Even during a pandemic, the capital city of Austin has seen record-breaking job generation. The Austin Chamber of Commerce reported that 35 new locating companies have announced nearly 10,000 new jobs from January through October. That beats calendar year 2018 when 46 companies announced 9,424 jobs.

Enterprise Florida launches rural expansion toolkit
In the fall quarter, Enterprise Florida, the state-level economic development agency, launched a rural development program. The Rural Development Toolkit includes grant programs such as consulting services, worker training and site readiness.

Mine water a draw for data centers in Southwest Virginia
As the coal industry suffers, the coal region of Southwest Virginia may have discovered a way to diversify its economy. Many of the old underground mines and caves in the region are filled with water that’s around 50 degrees, which could be used to cool banks of servers used by data centers. According to a report by InvestSWVA, using the mine water could reduce electricity costs for data centers by more than 90 percent.

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