Around the South - Spring 2021

In March, U.S. manufacturers grew at a faster pace than at any time since 1983. Shown here (and above) are workers at the GE Appliance Park in Louisville, Ky., which has been a leader in reshoring jobs back from China.

Reshoring surges to record high

Reshoring during the pandemic of 2020 exceeded foreign direct investment by nearly 100 percent. It was, however, the poorest showing of FDI in years as trade between nations cratered during the pandemic. According to the Reshoring Initiative’s 2020 Data Report, reshoring deals created over 160,000 jobs in 2020, a record since the numbers were first published in 2010. Another report by Thomas, the 2021 State of North American Manufacturing Annual Report, showed that reshoring could add $443 billion to the U.S. economy this year.

U.S. factory activity strongest since 1983
In March, U.S. manufacturers grew at a faster pace than at any time since 1983. As the pandemic wanes and government aid dollars flow freely, manufacturers were full steam ahead as spring began. The Institute for Supply Management gave its measure of factory activity a score of 64.7 percent in March, the highest in 37 years.

Birth rate in U.S. lowest in more than 40 years
The birth rate in the U.S. fell 4 percent in 2020 to about 3.6 million babies. It is the sixth straight annual decline and the lowest since 1979, according to the U.S. Centers for Disease Control and Prevention (CDC).

New York City, a breeding ground for Southern deals, is experiencing an office space vacancy Armageddon
Vacant office space in New York City is at a point not seen since 1994, following the recession of 1993. Work-from-home has created all kinds of sublease situations in the “city.” Relocations of workers and companies have also contributed. According to Cushman & Wakefield, the vacancy rate in Manhattan reached 16.3 percent in the first quarter of 2021. This has driven rents down dramatically and there seems to be no end to the glut of office space in New York City at this point.

Whoa! Number of available jobs sets record
Remember from 2015 to 2018 when the U.S. had over 7 million jobs available and virtually no takers? Back then we were averaging about 150,000 jobs created per month, or about 1.8 million jobs gained per year. No one seems to be focusing on the real root of this problem — massive cuts in immigration and the fact that 20- and 30-year-olds do not believe they can afford children. Population and fertility rates are at all-time lows in the U.S. the last several years. So, where are we now? In June, the U.S. Department of Labor reported that there are 9.3 million jobs available. That is the highest total on record by over 2 million.

Proposed LNG export terminals in Louisiana could capture tons of greenhouse gases
Arlington, Va.-based Venture Global LNG will use advanced technology to capture greenhouse gases from the export terminals in Louisiana that it plans to build. Already there are several active LNG terminals in Louisiana, including the giant Cheniere terminal in Southwest Louisiana. Other billion-dollar deals are in play, and Venture Global LNG is planning its carbon capture efforts at all new LNG export facilities.

Move over natural gas; move in batteries
The proliferation of natural gas produced over the last 15 years by the fracking frenzy is waning. Coal power plants have been replaced by natural gas-fueled plants, and that transformation hasn’t even come close to completing. Yet, there is a new power source in town —  battery storage charged with wind and solar energy. Vistra Corp., one of the largest owners of natural gas power plants, announced this spring it is investing $1 billion in battery storage.

Nashville, the latest “it” city, may have seen its best days
In the spring quarter, Oracle announced it would bring 8,500 jobs to Nashville’s downtown riverfront. It is one of the South’s most impressive economic development announcements in history. Nashville is also the latest major market in the South to become an “it” city joining Atlanta, Dallas, Charlotte and others. But there is a problem in Nashville, one of the nation’s fastest growing cities. The Institute for Truth in Accounting recently ranked it one of the country’s five worst “sinkhole” cities, with $22,000 in debt per resident. Its bonded debt has increased by more than $1.25 billion in 10 years. Much if not all of the city’s reserve funds have been spent and new property tax increases have been passed to fill in the financial gaps. The state has even considered a state takeover of the city’s finances. What goes up must come down.

Raytheon CEO says the Biden corporate tax plan will reduce the company’s investments
Raytheon CEO Greg Hayes, in a speech to the Economic Club of Washington, D.C., in the spring quarter, said that President Biden’s corporate tax increases, infrastructure plan and other initiatives to raise revenue will reduce investment by the aerospace and defense giant by about $1 billion a year. Hayes said that Raytheon spends about $5 billion a year on R&D and other expenditures, and if the corporate tax rate is raised from 21 percent to 28 percent, it would cost the company about $1 billion more in taxes.

Majority of small businesses expect revenue to grow this year
According to a report by Bank of America, 60 percent of small businesses expect their revenue to increase over the next 12 months (as of spring quarter). Just 34 percent of those same businesses thought revenue would increase this time last year.

Virginia taking up rural jobs act
Sen. Mark Warner is heading up an effort in the Commonwealth of Virginia to expand the New Markets Tax Credit that will set aside $1 billion for communities in the state with less than 50,000 people. Rebranded as the Rural Jobs Act, the incentives will give rural communities in the state — particularly those in Southwest Virginia — a leg-up when it comes to job creation.

Charlotte-based Bank of America raising wages to $25 an hour
Charlotte-based Bank of America announced this spring that it will raise its minimum hourly wage to $25 by 2025. The massive bank (the second largest in the country) just completed a plan to raise employee wages to a minimum of $20 an hour.

Source: Alabama “economic momentum” near the top in the U.S.
According to State Policy Reports, a Washington, D.C.-based publication, Alabama ranks No. 8 in the Index of State Economic Momentum for the first quarter of 2021. The state’s score was 1.31, with a national average of zero.

A survey this spring by Blind, an online community that enables professionals to share their opinions anonymously, showed that Austin is the most dynamic tech city in the U.S.Survey: Austin most vibrant U.S. tech city
A survey this spring by Blind, an online community that enables professionals to share their opinions anonymously, showed that Austin is the most dynamic tech city in the U.S. Ninety-two percent of tech execs in Austin believe the city fosters a vibrant environment for tech companies. San Francisco and Seattle came in second in the survey with 85 percent, and New York City with 83 percent. 

Census: Austin is America’s fastest growing city
In the spring quarter, the U.S. Census Bureau released its “New Vintage 2020 Population Estimates Available for Nation, States, Counties and Puerto Rico Commonwealth.” The fastest growing metro areas in the U.S. in 2020 were Austin; Boise; Lakeland, Fla.; Fayetteville, Ark.; and Cape Coral-Fort Myers, Fla. Making the top 10 in the South were Raleigh, North Port-Sarasota, and Charleston, S.C. 

Elon Musk wants to create a city at South Texas rocket launch base
Not too long ago, Elon Musk and his SpaceX startup chose a site near Brownsville, Texas, to launch rockets and land them. The private spaceflight company has already launched large rockets in tests in Boca Chica, Texas, a beachside community that is so tiny (other than in the summer) only a few dozen homes are occupied. Now Musk would like to create a community in Boca Chica. He tweeted in April, “Please consider moving to Starbase or greater Brownsville/South Padre area in Texas & encourage friends to do so! SpaceX’s hiring needs for engineers, technicians, builders & essential support personnel of all kinds are growing rapidly.” So remember the “company towns” that were made up of  textile and apparel company-owned homes and stores? Well, today, Elon Musk is trying to build a town based on space called “Starbase.”

$200 with a “B” — the economic effect on South Carolina’s economy from manufacturing
The manufacturing sector in South Carolina has a $200 billion impact on the Palmetto State’s economy, according to the South Carolina Manufacturers Alliance. South Carolina is one of the South’s most highly concentrated manufacturing states with the likes of BMW, Boeing, Michelin, Volvo and Mercedes-Benz leading the way. The study examined 127 specific manufacturing occupations to determine the industry’s footprint across the state and the economic stability it creates, according to a news release.

Space centers in Louisiana and Mississippi to develop lands and more product
NASA’s Michoud Assembly Facility in East New Orleans and the John C. Stennis Space Center just to the east in Hancock County, Miss., are planning on developing business parks on their grounds to lure suppliers and other space-related companies. The space centers are modeling the business parks on other successful projects at the Kennedy Space Center in Cape Canaveral, Fla., and at the Marshall Space Flight Center in Huntsville, Ala.

Port of Virginia to be deepest on the East Coast
By 2024, the Port of Virginia will be the deepest port on the  East Coast at 55 feet. At that time, the port will be able to accommodate two-way traffic for some of the world’s largest maritime vessels. The port has invested over $1 billion in its facilities since 2015.

Virginia is first state in the South to legalize marijuana
Virginia lawmakers in the spring quarter legalized marijuana, the first state in the South to do so. Under the law, adults 21 and older will be able to use and grow marijuana, beginning in July The state will also launch a legal and regulated market with tax revenues going toward education and equity initiatives as well as addiction treatments and public health services.

State of Georgia buys megasite near Savannah
When looking to locate in the U.S., Volkswagen and Volvo checked out the megasite in Bryan County, Ga., near Savannah. Both passed, even though officials there thought they had landed Volvo, which eventually chose a site near Charleston, S.C., in Berkeley County. Volvo has expanded several times at its facilities in Berkeley County. Now, the 2,284-acre Bryan County megasite has been purchased by the Savannah Harbor-Interstate 16 Corridor Joint Development Authority. The strategic purchase of the Bryan County Mega-Site is the largest in Georgia state history, according to a press release from the governor’s office.

Life sciences have a good year in North Carolina
Life sciences firms in North Carolina had an excellent year in 2020 as many are expanding their capacities to make pharmaceuticals and biological therapies in the state. Expansions in North Carolina in 2020 saw $2.3 billion in investment with about 2,800 new jobs created.

Apple’s North Carolina deal could garner $1 billion in incentives
Apple’s announcement this spring that it will set up a billion-dollar campus that will house 3,000 workers in the Research Triangle region of North Carolina is expected to garner $845 million in tax breaks over the next 40 years. When local incentives are included, the total is close to $1 billion in incentives to the tech giant.

North Carolina No. 1 in the nation for rural clean energy jobs
A new report from E2 showed that North Carolina ranks first in the nation for rural clean energy jobs. The report stated that over 25 percent of clean energy jobs are located in rural regions of the state.

West Virginia is offering remote workers $12,000 to move there
West Virginia, the South’s smallest state in terms of population, launched a program to recruit remote and self-employed workers. The state is offering $12,000 and a free, year-long pass for outdoor activities for those who relocate to the state for at least two years.

The Alabama Business Confidence Index has Montgomery topping all other cities in the state in the first quarter of 2021. The index is done by the University of Alabama’s Center for Business and Economic Research. Montgomery led all cities in Alabama with a score of 58.8 in the first quarter of 2021.Business confidence is high in Montgomery, Ala.
The Alabama Business Confidence Index has Montgomery topping all other cities in the state in the first quarter of 2021. The index is compiled by the University of Alabama’s Center for Business and Economic Research. Montgomery led all cities in Alabama with a score of 58.8 in the first quarter of 2021.

Forbes: UAB is America’s best large employer
The University of Alabama at Birmingham (UAB) was named “America’s Best Large Employer” by Forbes magazine. UAB was picked ahead of other schools such as Yale University, as well as 500 public and private companies. UAB is Alabama’s largest public employer and home to one of the region’s largest academic medical centers. UAB employs more than 23,000 people.

South Carolina Ports opens new terminal
The South Carolina Ports welcomed the first vessel to the Hugh K. Leatherman Terminal in the spring quarter. The terminal is the first container terminal to open in the United States since 2009.

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