Around the South - Spring 2019

Chinese state media: “Don’t say we didn’t warn you.”

People’s Daily, the largest newspaper in China and the official newspaper of the Communist Party of China, published a story in the spring quarter that warned the U.S. in this protracted trade war between the two countries. “We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you,” the media property wrote. The phrase “Don’t say we didn’t warn you” has been used before by People’s Daily in 1962 before China’s border war with India and ahead of the 1979 China-Vietnam War. The warning seems to indicate that China will retaliate against the U.S. as a result of the trade war. The vast percentage of the world’s rare earth minerals that are used in a variety of high-tech gear, including cell phones and other electronics, are mined in China. The warning seems to center on China restricting rare earth minerals to the U.S. Few know what the consequences will be if China reduces the sale of rare earth minerals in the current trade war.

U.S. breaks record for longest economic expansion
In June, the economic expansion that began in the summer of 2009 broke the record for the longest recovery in the nation’s history. The current expansion beats the 120-month-long period of an expanding economy from 1991 to 2001. The average length of the 12 expansions since 1945 has been 58.4 months. This one is 121 months and counting.

Layoffs surge by 35 percent, highest level in a decade
Job layoffs in the first quarter of this year were at the highest levels in a first quarter in 10 years, according to outplacement firm Challenger, Gary & Christmas. The total number of layoffs stood at over 190,000, a 10.3 percent increase from the fourth quarter and a 35.6 percent increase from the same period a year ago. The layoffs are the highest for a first quarter since 2009.

At full employment and with fertility rates at historic lows, the U.S. needs more legal immigrants; the opposite is happening
In President’s Trump’s State of the Union address in February, he said, “Legal immigrants enrich our nation and strengthen our society in countless ways. I want people to come into our country in the largest numbers ever, but they have to come in legally.” It’s a good strategy, one of the only ways the U.S. can replace its baby boomer workforce that is aging out of the workforce by millions each year. At the same time, the U.S. fertility rate is at an all-time low, meaning it is impossible internally to replace those baby boomer workers. While Trump’s statement is the answer to a workforce that is not growing, the numbers show a different scenario. The U.S. Census Bureau recently released figures on legal immigration into the U.S. from July 2017 to July 2018. Overall, the U.S. added 978,826 legal immigrants during that year. From July 2016 to July 2017, the total net international migration totaled 1,111,283. So, the U.S. lost over 132,000 net legal immigrants from 2017 to 2018.

U.S. birthrate falls again in 2018
For four straight years now, the birthrate in the U.S. has dropped to 3.78 million births. The drop represents a 2 percent decrease from 2017. The numbers represent a record low in the U.S. fertility rate. Birthrates fell for nearly all racial and age groups, with only slight gains for women in their late 30s and early 40s, the CDC says. This comes at a time when millions of baby boomers are aging out of the workforce and many cannot be replaced.

Laredo becomes top U.S. trade hub
An increase in energy exports has propelled the Port of Laredo in Texas to the nation’s top center for trade. In March, $20.1 billion of combined exports and imports moved through Laredo according to data released by the U.S. Department of Commerce. The total surpassed the $19.7 billion of imports and exports that went through the Port of Los Angeles. Energy exports helped Laredo beat long-time leader Los Angeles. Also, an increase in exports to Mexico and a decrease in Chinese imports helped propel Laredo to the No. 1 trading spot.

Amazon files development plans with Arlington County, Va.
Amazon filed development plans in the spring quarter of its first phase of its HQ2 in Crystal City, Va. The company is calling its development National Landing. The first phase will include two 22-story buildings at Metropolitan Park totaling 2.1 million square feet. The HQ2 will eventually house at least 25,000 employees.

More than half of all apartments in Bay County, Fla., are still damaged and unlivable as a result of Hurricane Michael in October of 2018.Housing is still a disaster in Hurricane Michael’s destructive path in Northwest Florida
More than half of all apartments in Bay County, Fla., are still damaged and unlivable as a result of Hurricane Michael’s wrath in October of 2018. Panama City Community Development data shows that of 8,384 apartments in Bay County, only 3,837 were considered livable and of those, only two were available as of May 14. No new units are expected to be available for four to six months, or about a year after the hurricane hit.

The U.S. is no longer the world’s most competitive economy
Incorporating 235 economic indicators, the Switzerland-based business school IMD dropped the U.S. from first to third in its ranking of the world’s most competitive economies. The U.S. had the world’s most competitive economies for nine straight years until this year. Singapore and Hong Kong rose to No. 1 and No. 2. China placed 14th.

Domestic beer industry blames Trump tariffs for job losses
Since 2016, jobs in the U.S. beer industry have dropped by 40,000. A report by the Beer Institute and National Beer Wholesalers blamed the job losses on aluminum tariffs imposed by President Trump. The tariffs have increased aluminum can costs.

Trade wars still tamping down South’s whiskey exports
Famous Tennessee whiskey and Kentucky bourbon have seen their exports, specifically to Europe and Asia, drop in value as a result of the trade wars. According to a report from Middle Tennessee State University, Tennessee whiskey exports fell by more than 30 percent in the fourth quarter of 2018. The value of those exports, which had been rising for years, dropped from $197 million to $135 million. After soaring 28 percent in the first six months of 2018, Kentucky bourbon exports dropped by 11 percent in the second half of last year. Kentucky produces 95 percent of the world’s bourbon, and the industry had been growing by double digits for years.

In the last 10 years, Kentucky has added almost 50 new distilleries
Since 2009, Kentucky’s distilling industry has added more than 10,000 jobs and opened more than 40 new distilleries. In fact, in 2009 there were 10 distilleries and today there are 68 in the Commonwealth. However, since countries put tariffs on American bourbon in retaliation to our own tariffs, whiskey exports fell 11 percent in the second half of 2018.

Houston is the No. 1 destination in the U.S.
According to the latest U-Haul migration trends report, Houston is the No. 1 U.S. destination city. Houston saw a 3 percent gain in one-way U-Haul truck arrivals. Each year, U-Haul counts down its top 10 U.S. destination cities as a prelude to Memorial Day weekend, the unofficial start of the summer moving season. About 45 percent of all moves each year occur between Memorial Day and Labor Day weekends. In addition to Houston, the top five one-way moves in 2018 were Chicago, Las Vegas, San Antonio and Orlando.

Austin is a magnet for U.S. based migrants
Austin is the fastest growing metro in the U.S. based on percentage of population gain. So, where are these people coming from at a clip of about 150 a day? California is by far the largest state source of migration to Austin, sending thousands of tech savvy talents to the Lone Star State. But Florida is not far behind. Other states contributing to Austin’s incredible increase in workforce are New York and Colorado.

Texas added more jobs than any other state
From April 2018 to April 2019, Texas added 283,000 jobs, a growth rate of 2.7 percent. The job totals were more than any other state. As of May, Texas’ unemployment rate was at 3.7 percent.

Texas boosts film incentives by $50 million
This year’s Texas Legislature raised movie, television and video game incentives to $50 million from $32 million. The new incentives will take effect September 1.

Texas leads nation in fastest growing cities
Everyone is moving to Texas. The Lone Star state leads the nation for the fastest growing cities with half of the top 10. Houston, San Antonio, Fort Worth, Austin and Frisco make the top 10 of cities with the largest increase in population.

China retaliates, U.S. exports fall
In May, China retaliated against new U.S. tariffs as the trade war escalated. Over a six-month period ending in March, exports from the U.S. to China dropped by $18.6 billion, or a loss of 26 percent. Imports from China declined as well. Exports were, however, higher to Europe and Mexico in that six-month period.

24/7 Wall Street ranks top U.S. markets with large STEM labor forces
24/7 Wall Street ranked cities based on large STEM labor forces in the winter quarter. California-Lexington Park, Md., ranked No. 1. San Jose was second followed by Huntsville, Ala. Southern markets making the top 10 included Durham-Chapel Hill, N.C.; Arlington-Alexandria, Va.-District of Columbia; Raleigh and Austin.

Freight shipments in big slump
Freight shipments across all modes of transportation fell 6 percent in May compared to the same month last year, according to the Cass Freight Index. It was the sixth consecutive month of year-over-year declines and the biggest year-over-year decline since November 2009. Loads on the spot market, where retailers and manufacturers buy trucking capacity when they need it rather than on contract, fell by over 60 percent in May year-over-year.

Virginia Tobacco Commission will help pay off your student debt if you move to rural Virginia
The Virginia Tobacco Region Revitalization Commission, which was created two decades ago to spend Virginia’s portion of the national tobacco settlement, announced in the spring quarter it will help pay off student loan debt for those willing to live and work in the rural regions of Southwest and Southside Virginia. In 20 years, the Commission has invested $1 billion on a wide range of projects that benefit economically depressed areas of the Commonwealth. The Commission has revised its student loan debt repayment program and will now spend $5 million on it every two years. To qualify you must have graduated college — two year or four year —
and move to counties and cities in the Commission’s coverage area. For the healthcare jobs, the commission is partnering with the Virginia Department of Health, which already runs a program awarding people up to $140,000 in student loan debt assistance over four years to work in under-served areas.

USA Today named Point Pleasant, W.Va., as the No. 2 best small town cultural scene in the U.S. An annual festival in Point Pleasant is devoted to the Mothman legend. In West Virginia folklore, the Mothman is a creature reportedly seen in the Point Pleasant area from November 12, 1966, to December 15, 1967. A 12-foot statue of the creature was unveiled  there in 2003.USA Today names best small town cultural scenes
In the spring quarter, USA Today named the best small town cultural scenes in the U.S., and several in the South were cited in the top 10. Doylestown, Pa., was named No. 1 and Point Pleasant, W.Va., was No. 2.  Making the top 10 in the South were Tarpon Springs, Fla.; Staunton, Va.; Paducah, Ky.; Guthrie, Okla.; and York, S.C.

Alabama passes new incentives
Gov. Kay Ivey signed new legislation called the Alabama Incentives Modernization Act. The new bill modernizes Alabama’s incentives to take advantage of federal opportunity zones, recruit industry to rural counties and attract technology companies to the state. Alabama’s overall economy is very strong, however, some parts of the state are not participating in the growth. The new incentives help some of these counties with additional tax credits.

Alabama breaks annual investment record with $8.7 billion in investments for 2018
It was a banner year for Alabama in 2018 with new records in capital investments and job creation numbers. The Alabama Department of Commerce’s 2018 New and Expanding Industry Report outlines $8.7 billion in 357 economic development projects by companies locating new facilities or expanding existing operations in Alabama. Those investments will result in about 17,000 new jobs across the state. Almost half of those jobs came from companies in 16 different countries, investing $4.2 billion in Alabama. In this year’s SB&D 100, Alabama was named “State of the Year” for its performance in calendar year 2018 (page 34).

Mississippi’s GDP hit 10-year high in 2018
Real GDP growth in 2018 in Mississippi was at a little more than 1 percent in 2018, according to the Bureau of Economic Analysis. The figure represents the highest GDP growth in the Magnolia State in over 10 years.

The Wake Forest Innovation Quarter in Winston-Salem, N.C., has been selected as an inaugural member of the Global Institute on Innovation Districts. There were only six research park districts chosen worldwide.

Wake Forest Innovation Quarter in Winston-Salem named member of Global Districts Group
The Wake Forest Innovation Quarter in Winston-Salem, N.C., has been selected as an inaugural member of the Global Institute on Innovation Districts. There were only six research park districts chosen worldwide. The others are in Amsterdam; Melbourne, Australia; New York; Pittsburgh and St. Louis.

SmartAsset names top 10 creative places in the U.S.
In the spring quarter, published what it thinks are the top 10 places in the U.S. for job opportunities in creative fields. The ranking also factored in cost of living. The No. 1 creative place in the U.S. was Savannah, Ga. In the South, Nashville, Atlanta, Durham-Chapel Hill and Kansas City made the top 10.

BB&T and SunTrust to anchor 47-story Charlotte tower
The merger of Winston-Salem-based BB&T and Atlanta-based SunTrust to form Truist will result in a new headquarters in Charlotte. The new company will lease 561,000 square feet of space in the new 47-story Hearst Tower in Charlotte. The Charlotte headquarters could house up to 2,000 people. Once merged, Truist will become the sixth largest bank in the U.S.

Honeywell chooses site for new Charlotte HQ
Honeywell will anchor a new office tower in uptown Charlotte as it relocates its headquarters from New Jersey to North Carolina. The company has chosen the Legacy Union development and will occupy about 280,000 square feet in a tower currently under construction. Honeywell expects to make the move in 2021.

More petrochemical plants slated for New Orleans-to-Baton Rouge industrial corridor
While petrochemical activity has slowed somewhat in the Gulf of Mexico regions of Texas and Louisiana, there is still plenty of work to be done on new facilities. More than $7 billion in announced facilities are slated for the Mississippi River corridor in Louisiana. But, is there enough construction labor available to complete the projects? Projects like Yuhang Chemical, ExxonMobil, Formosa, Shintech, Valero, Diamond Green Diesel and others are still waiting to be completed.

Naples, Fla., topped the list of “boomtowns” by personal finance website GOBankingRates.Southern cities outrank all in website ranking
Personal finance website GOBankingRates analyzed 347 American cities with populations of 500,000 or under, looking for places experiencing a combination of economic prosperity, population growth and rising incomes. To rank the top “boomtowns,” or cities that meet these criteria, the site looked at five-year data on population, housing, GDP and per-capita income from the U.S. Census Bureau’s 2017 American Community and the Bureau of Economic Analysis. The top nine cities in the ranking were all located in the South beginning with Richmond (9); Port St. Lucie (8); Durham (7); Charlottesville (6) and the top five included Miami; Raleigh; Fayetteville, Ark.; and Sebastian, Fla. The No. 1 market was Naples, Fla.

Louisville is the fastest growing market for hotel rooms in the nation
A recent report from CBRE Research showed in the spring quarter that Louisville, Ky., had the highest year-over-year increase in demand for hotel rooms in the first quarter of 2019 at 11.4 percent. The national growth in demand for hotel rooms is 2.4 percent. Nashville placed second with a 10.2 percent increase in demand.

Walmart to build new corporate campus in Arkansas
Walmart, the world’s largest retailer and the U.S.’s biggest private-sector employer, announced in late May it will build a new corporate campus in its hometown of Bentonville, Ark. The new campus will feature parks, bike trails, fitness centers, food trucks and child-care centers. The facility will house up to 17,000 employees.

The Port of Corpus Christi is set to pass the Port of Houston as the top U.S. crude oil export hub over the next 10 years.

Port of Corpus Christi to become No. 1 U.S. crude export hub
The Port of Corpus Christi is set to pass the Port of Houston as the top U.S. crude oil export hub over the next 10 years, according to a report from Wood Mackenzie. New pipelines and port expansions will route more than 2 million barrels of Permian Basin crude oil per day to Corpus Christi. The amount of oil sent to the port will quadruple over the next five years.

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