Around the South - Fall 2023

FDI in China turned negative for the first time on record

China’s Foreign Direct Investment turned negative on a net basis in the third quarter of 2023. That has never happened since records first began. China’s economy is suffering as the world’s second largest economy continues to struggle with COVID recovery, a dearth of labor, a lack of consumer and corporate confidence and reshoring of companies that have been manufacturing in China for decades. Data from the third quarter showed an outflow of $11.8 billion, the first net negative since records began in 1998. In addition to negative FDI, China’s exports fell for the sixth straight month in October. Chinese exports fell 6.4 percent in October compared with a year earlier, to $275 billion.


In related news regarding China, the Communist country passed a significant milestone last year when, for the first time, it traded more with developing countries than the U.S., Europe and Japan combined, according to the Wall Street Journal.

The U.S. continues to keep the heat on China with export bans, tariffs and investment limits. This has created a lessening of a reliance on supply chains out of China and more jobs for Americans and Europeans that otherwise might go to China. The limitations have also created a more secure technology transfer among Chinese and U.S. companies. 

Gross domestic product in the U.S. grew by a remarkable 5.2 percent in the third quarter, according to federal data and Oxford Economics. Pictured is the Gulfstream plant in Savannah.Inflation can’t slow this nation’s economy

Gross domestic product in the U.S. grew by a remarkable 5.2 percent in the third quarter, according to federal data and Oxford Economics. This blew way past any other economy, including China, the European Union, Japan and Canada. According to news reports, the Paris-based Organization for Economic Co-operation and Development upgraded its forecasts for U.S. growth this year and next, while downgrading the two-year outlook for the 20 nations that use the Euro currency. 

So where did your favorite restaurant manager go after COVID?

Familiar faces you saw at your bank, your favorite bar or restaurant seemed to disappear during and after the COVID years of 2020 and 2021. Where did everybody go? It could be that they retired. At least so think officials with the Federal Reserve.

More than three and a half years after COVID decimated the U.S. economy, there are now 2 million more retirees than predicted by the Federal Reserve. Called the “Great Retirement,” apparently a couple million workers in this country simply up and retired rather than deal with the pandemic in their previous working environment. 

In an age when birthrates in the U.S. are at their lowest levels since the Great Depression, deaths almost equal births and those turning 65 total ten times that of those turning working age (16), the labor participation rate for those over 65 and older is still well below pre-pandemic levels. The fact that there are 2 million more retirees than expected by the experts is just another blow to a workforce that cannot even come close to satisfying the 10 million jobs that are available in the South and elsewhere in the country.  

RurAL on a winning streak, as is the rural South in general

Economic developers from rural communities in Alabama attended the RurAL Summit in October that was sponsored by the Alabama Department of Commerce. It was held at the Central Alabama Community College.

Since 2020, the state’s rural counties have attracted over $4 billion in new capital investment through a series of economic development projects expected to create more than 5,400 jobs, according to Commerce estimates.

Last year alone, new projects landing in Alabama’s “targeted” or rural counties will bring $1.8 billion in new investment and 1,900 jobs to communities such as Courtland, Selma, Greenville, Fayette and Cusseta.

Governor Kay Ivey, a native of Wilcox County, told the economic developers gathered at the Summit that she is committed to helping spur growth across all of Alabama, particularly in the state’s rural areas.

Who said, “Eighty percent of all new jobs are created by existing industry?” Then again, 100 percent of all lost jobs are created by existing industry

We have heard for decades the fable that 80 percent of all new jobs are created by existing industry. It is just untrue. It is a different percentage in the South in any given year. Look at our “Big Buffalo Awards” in this issue. Seventy-five percent of them are new projects. Yet, we are quite sure that 100 percent of lost jobs are created by existing industry.

That sadly happened in the fall quarter in Ardmore, Okla., in November and residents of the city were stunned. “No one saw it coming,” said Bill Murphy, CEO of the Ardmore Development Authority, when Michelin announced it is winding down tire production at the plant that houses 1,400 workers. Michelin is Ardmore’s largest employer and a manufacturing anchor for Southern Oklahoma’s economy.

The plant, which opened in 1970, will close by the end of 2025 or sooner. Michelin officials cited changes in the passenger vehicle market, including larger tires for SUVs and new designs for electric vehicles. The company made the decision to pass on modernizing the plant for next-generation tires. The rubber-making line at the plant will continue to operate to deliver product to other Michelin tire plants in the U.S.

Louisville continues its quest as an all-for-everyone major market in the South

According to a report from the payroll and HR online platform Gusto, the Louisville metro area was the fastest growing market in the U.S. for job growth in September. Jobs grew at a 2.5 percent pace in Louisville that month. Second place for job growth in September was Virginia Beach at 1.5 percent. Completing the top five were Indianapolis, Richmond and Cincinnati, all at 1 percent.

Kentucky tourism development projects break all-time record with over $300 million invested

Kentucky had a banner year in tourism investment in 2002, including constant additions to its famed Bourbon Trail.  Then came 2023. Over $300 million in capital expenditures broke the 2022 record for investments in tourism projects in the Commonwealth. Nine new tourism development projects were announced in 2023. Over 90,000 jobs are supported by tourism in Kentucky, and the Kentucky Bourbon Trail surpassed 2 million visitors for the first time in 2023.

One of the largest clean energy projects ongoing is Hyundai, LG and SK’s investments throughout the South, and more than $14 billion in Georgia alone. Shown above is Hyundai’s Metaplant under construction in October 2023.Georgia hits the jackpot with clean energy jobs

Georgia, with a large electric vehicle industry that is just emerging, is second only to Michigan with the number of new and expanded clean energy projects announced since August, when President Joe Biden signed the Inflation Reduction Act (IRA), which provides incentives for clean air application in manufacturing and other industries.

Nearly 20,000 jobs are being created in Georgia in new clean energy projects, a full 10 percent of the 200,000 expected to be created since the signing of the IRA. The comprehensive healthcare and clean energy law included billions of dollars in tax credits for the private sector to transition from fossil fuels to clean energy. Billions have already been gifted to those such as Hyundai, Toyota and other automakers, as well as new hydrogen fuel and carbon capture projects. Deals in those fields announced since the IRA was implemented are in the hundreds of billions. One of the largest clean energy projects ongoing is Hyundai, LG and SK’s investments throughout the South, and more than $14 billion in Georgia alone.

Interior Department approves massive Virginia wind farm

In November, the Biden Administration approved a plan called the Coastal Virginia Offshore Wind Project that is designed to erect up to 176 giant wind turbines off the coast of Virginia. It would be the nation’s largest offshore wind farm yet. If completed, the 2.6-gigawatt wind farm would produce enough electricity to power more than 900,000 homes without creating any carbon dioxide. The project, to be built by Dominion Energy, would provide about 900 jobs each year during construction and support about 1,200 jobs once the wind farm begins operations. 

“All of the above” clean energy hub may settle in the coal country of Southwest Virginia

Southwest Virginia, specifically Wise County, is coal country if ever there was one in the South. . .that region and East Kentucky.

Wise County and neighboring localities in Southwest Virginia may become home to a massive clean energy development that could attract up to $8.25 billion in capital investments, Gov. Glenn Youngkin announced in November. A joint agreement between Energy DELTA Lab, Dallas-based Fortune 100 energy company Energy Transfer and Wise County will involve the development of 65,000 acres of former coal mining land for “all-of-the-above” energy technology (Virginia Business) —
including natural gas, nuclear energy, renewable energy and other emerging energy sources.

When completed, the massive $8.25 billion private investment project could generate 1 gigawatt of power. A total of more than a dozen individual developments are being considered that could generate nearly 2,000 jobs over 65,000 acres, mostly of old coal mines. “All of the above” projects include wind, solar, nuclear, hydrogen and pumped storage hydro, as well as energy storage technologies.

The green fuel that even red America loves

Many Republicans have railed against the government’s subsidies for wind and solar, excoriated its support for electric vehicles and decried moves to curb oil and gas. But one clean-energy candidate has broad support from some of the reddest parts of the U.S. — hydrogen. Take the Gulf Coast of Texas and Louisiana, a largely Republican-controlled region that is home to many of the oil and gas refineries in the U.S.

Backers of hydrogen in that area include Rep. Randy Weber (R., Texas) and Rep. Clay Higgins (R., La.), a Freedom Caucus member who describes fossil fuels as “the lifeblood of our modern society.” Both support a Houston-based hydrogen program vying for a piece of $7 billion in federal grants, though they voted against the legislation that made the grants possible.
The Wall Street Journal

Slow going on Apple’s RTP campus

No word lately on when Apple is building its $552 million campus in Research Triangle. The 2-million-square-foot campus is expected to house 3,000 workers. But for now, many of those are working on MetLife’s tech campus in Cary.  Apple announced the RTP campus in April 2021, stating that it would focus on engineering, artificial intelligence and machine learning. The tech giant, headquartered in Cupertino, Calif., said it would invest $552 million and create at least 3,000 jobs paying an average of $187,000 a year.

On January 3, 2021, Epic Games announced a new headquarters at the former Cary Towne Center Mall in Cary, N.C. Yet, public records from the Town of Cary show no activity regarding Epic’s headquarters plan going forward.Is Epic Games more than wishy-washy on Cary headquarters?

On January 3, 2021, Epic Games announced a new headquarters at the former Cary Towne Center Mall in Cary, N.C., near Raleigh. Since then, the company and the local government have demolished most of the 980,000-square-foot former mall on an 87-acre site.

Epic operates Fortnite, one of the world’s largest games, with over 350 million accounts and 2.5 billion friend connections. 

Yet, public records from the Town of Cary show no activity regarding Epic’s headquarters plan going forward. Even worse, Epic recently announced layoffs totaling 170 people in the Triangle region.

Public records obtained from the Town of Cary show zero updates from Epic Games on its plans for the former shopping mall, but they do show a flurry of concern. From the Triangle Business Journal: “Sad news,” said Mark Lawson, president of the Cary Chamber of Commerce, referencing the firm’s mounting legal bills and adding that he is “not surprised.”

New LNG plant picks contractors to build facility in Louisiana

“A new liquefied natural gas project in Louisiana led by a veteran Houston LNG developer officially has contractors for its facility. Gulfstream LNG, which plans to export 4 million tonnes per annum of LNG, has brought Honeywell UOP and Kiewit Energy Group as technical partners for the Plaquemines Parish project. All three contractors have headquarters or major offices in Houston. Baker Hughes will provide liquefaction equipment, Honeywell will provide its gas treatment technology, and Kiewit will provide engineering, procurement and construction support.”
Houston Business Journal

Alabama wage growth outpaces national wage growth

“Wage growth has been slowing in Alabama, but it was higher than national wage growth in October. For workers who have stayed in the same job for the last 12 months in Alabama, median annual salary was $60,500 in October, 6 percent higher than one year prior. That’s according to data from ADP Pay Insights, which tracks wages and salaries of over 10 million employees over a 12-month period. Nationally, those figures were $57,800 and 5.7 percent in October.”
Birmingham Business Journal

Northern Atlanta suburb the first BioReady Community in Georgia

“A northern Atlanta suburb has been dubbed gold BioReady Community, a designation some local life sciences leaders hope will encourage investment in the industry. Johns Creek is the state’s first gold-designated BioReady Community, Maria Thacker-Goethe, president and CEO of trade association Georgia Bio, announced. The program aims to encourage communities to streamline the process for luring biological and life sciences companies to Georgia.

“The BioReady designation indicates the community’s zoning allows for biotech laboratory and manufacturing and that it provides other services, such as a life sciences liaison in city hall. The designation is meant to be a signal that the area is friendly to life sciences business.”
Atlanta Business Chronicle

Samsung’s economic effect on Central Texas’ economy doubled in one year

Samsung has been operating in Austin for decades making computer chips and other technological wonders. Construction is ongoing at its new campus in Taylor, Texas, just outside the Austin city limits. It is also expanding its long-time home in North Austin. The chipmaker — part of the South Korea-based Samsung Electronics Co. Ltd. — apparently pumped $13.6 billion into the local economy at its two sites in 2022, up from $6.3 billion the year prior, while also supporting 21,000 direct and indirect jobs.

Wolfspeed looking for fast ramp up to North Carolina chip plant

Wolfspeed is cranking up its $5 billion semiconductor materials plant that is under construction in Chatham County, N.C., near Siler City. They have just begun hiring and expect to house 1,800 workers at the plant by 2030. Wolfspeed’s CEO Gregg Lowe expects the North Carolina plant will be built and operational quicker than the company’s plant in Mohawk Valley, N.Y., where production of power devices has recently started.

Urban Land Institute names Nashville the No. 1 “city to watch” in overall real estate prospects

For the third year in a row, Nashville has been ranked as the top market for overall real estate prospects, according to a new study by the Urban Land Institute. In the fall quarter, the Washington, D.C.-based nonprofit, which focuses on real estate and land use, released its 2023 Emerging Trends in Real Estate Report.

New Orleans officials look to fix saltwater intrusion in the water supply

“Thanks to a changing climate and a deeper navigation channel in the Mississippi River, the saltwater intrusion that has threatened New Orleans area drinking water supplies this year is expected to become more frequent. The scale of the crisis has sparked calls for a permanent solution. While there is no shortage of ideas, they all come with a huge price and no certainty about who will pay for them. One favored plan would involve redesigning and rebuilding plants serving New Orleans and Jefferson Parish to allow them to remove salt from river water, projects that could cost hundreds of millions of dollars, parish officials say.”

Developers granted approval for additional phases of Huntsville industrial parks

“The Huntsville Planning Commission granted approval for additional phases to two industrial parks in the Limestone County part of the city. Both parks are near major employers Mazda Toyota Manufacturing, Amazon, Buffalo Rock and Polaris and will total more than 200 million square feet when completed. The commission granted preliminary approval of the Huntsville West Industrial Park and layout and approval of phase three of Airport Properties being developed by the Huntsville Logistics Center. Triad Properties and Fairway Investments have already started work on the first building in the Huntsville West industrial Park, a 385,000-square-foot facility that will feature 32-foot minimum clear heights, 60-foot speed bays, 84 truck docks, a 185-foot truck court with 60-foot apron, space for 198 car parking spaces and 96 trailer parking spaces.”

Duke Energy building first-of-its-kind green hydrogen system in Florida

“Duke Energy Corp. plans to build a first-of-its-kind green hydrogen system at its existing facility in DeBary. The combustion turbine will be the first such system deployed anywhere. The hydrogen system is part of Vision Florida, a program that also includes the company’s first floating solar array, a pilot underway at the Hines generating station in Polk County. Vision Florida tests innovative projects such as microgrids and battery energy storage, among others, to prepare the power grid for a clean energy future, according to the company’s website. The technology for the new hydrogen system was developed through collaboration between Charlotte, North Carolina-based Duke Energy, Chicago engineering firm Sargent & Lundy, and General Electric subsidiary GE Vernova, based in Cambridge, Massachusetts.” 
Orlando Business Journal

According to a new study by Forbes Home, Nashville is home to the worst commute in the U.S.Nashville has the worst commutes for workers in the nation

According to a new study by Forbes Home, Nashville is home to the worst commute in the U.S. Workers in Nashville wasted an average of 41 hours to traffic last year and residents spend on average 28.6 minutes commuting to work each day. Forbes Home writes in its report. “Nashville is a city that has experienced massive growth in recent years. The city has 452,194 workers with 2.6 percent of households that do not have access to a car.”

Austin is not immune from office space vacancies. One 66-story behemoth known as “Sixth and Guadalupe” is nearing completion and timing could not be worse. Tech giant Meta signed a lease for all 19 floors of office space as construction was underway in early 2022. When the building opens in 2023, all of the space Meta signed up for will be empty.Massive new office skyscrapers going up in Austin, but no one is moving in

Historically, Austin, Texas, is one of the most active office markets in the South, as its tech scene has accelerated dramatically since the 1990s. However, since the pandemic, new office space has been a crap shoot as gobs of Class A space sits empty in so many major markets throughout the country.

For example, metro Atlanta set a record for its vast amount of empty and unwanted office space. It only took three months to break that record in the summer quarter. Nearly 31 percent of all office square footage in metro Atlanta was available for rent at the end of September, according to data from real estate services firm CBRE.

Austin is not immune from the vacancies. One 66-story behemoth known as “Sixth and Guadalupe” is nearing completion, and timing could not be worse. Tech giant Meta signed a lease for all 19 floors of office space as construction was underway in early 2022. When the building opens near the first of the year, all of that space Meta signed up for will be empty. Meta has shelved its move-in plans and is now attempting to sublease nearly 600,000 square feet of space, 1,626 parking spots, 17 private balconies and a nice green space. As of November, there have been no takers.

In addition, the job search engine, Indeed, has moved into its namesake tower in Austin, however, it has placed 100,000 square feet of downtown office space on the sublease market. Currently, Austin has more space on the sublease market than ever before. 

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