Around the South - Winter 2016

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Winter 2016 Quarterly Update

Project activity in the South in the winter quarter continued to be supported by a growing services sector. While manufacturing projects beat service projects more than two-to-one in calendar year 2013, since 2014, project activity in services has improved dramatically. Technology startups, particularly from the financial tech sector (fintech), are very active. While fintech has exploded on the scene, traditional financial services projects in Q1 totaled only eight deals.

Non-automotive manufacturing projects meeting thresholds of 100 or more jobs and/or $30 million or more in investment were about equal to the number of projects coming from the services sector in Q1 2016. Including automotive deals, manufacturing beat services in deals meeting or exceeding our thresholds by a margin of 119 to 83 in Q1.

Activity from the oil, gas and chemical sectors has dropped to its lowest levels in years, as there were only four petrochemical projects announced in the South in Q1 2016. The figures for 2015 won’t be available until next issue, but from 2012 to 2014, the petrochemical industry averaged 26 projects a quarter meeting or exceeding $30 million in investment. So, essentially, those sectors have seen an almost total collapse in new project activity, although there are dozens of large chemical plants under construction at this time in Texas, Southwest Louisiana and in the industrial corridor between New Orleans and Baton Rouge. In other sectors, with several large projects, the aerospace industry really had an outstanding quarter, particularly in Florida. 

Markets in the South that were particularly active in capturing multiple projects in Q1 were: Mega-markets: Atlanta. Major markets: Austin, Charlotte, Louisville. Mid-markets: Brevard County, Fla.; Lexington, Ky. Small Markets: Augusta, Ga.; Lake Charles, La.; Martinsville-Henry County, Va.; and Crossville, Tenn.


Quarter            100 jobs +      $30 million +

2014 Q1      112             55

2014 Q2        97             41

2014 Q3      105             60

2014 Q4      129             73

2015 Q1      102             47

2015 Q2        98             42

2015 Q3        97             54

2015 Q4      121             72

2016 Q1      119             83


Red Ventures, a technology marketing company based in Fort Mill, S.C., has been on a hiring binge in the Charlotte region for years. What’s hot in 2016? High tech job creation.

Recent data from the Computing Technology Industry Association (Comp TIA) showed that the technology industry is one of the fastest growing job generators in the South and the nation. The report also indicated that technology job compensation is growing faster than any other sector.

According to CompTIA’s annual report, almost 200,000 new tech jobs were created in 2015, bringing employment in the sector to 6.7 million. While the technology industry made up 7.1 percent of GDP, the industry accounted for almost 12 percent of the total compensation of all workers in the U.S.

The No. 1 subsector where jobs are being created is in information technology where 106,000 jobs were gained last year. The average technology job earned $105,400 and technology companies paid out $708 billion to workers in the tech sector last year.

Job openings in the tech industry are skyrocketing, according to the report. There were 938,500 technology job openings in the fourth quarter of 2015, a whopping 29.4 percent gain compared with the fourth quarter of 2014. And new technology company starts are off the charts as well, as there were 473,500 new tech companies of all sizes launched in 2015. CompTIA reported that unemployment in the tech sector was just 2.6 percent at the end of 2015, about half the nation’s unemployment rate across all industry sectors in February.


BCG poll: U.S. overtakes China as No. 1 site for expanding production

A poll of senior executives at U.S.-based companies by the Boston Consulting Group shows that the U.S. has surpassed China as the No. 1 destination for manufacturing expansions. Thirty-one percent of executives polled indicated likely production expansions in the U.S., while 20 percent of those companies were likely to expand in China. In the same poll conducted in 2013, China led with 30 percent compared to 26 percent of executives likely to expand production in the U.S. ranked Chattanooga the lowest city for business startup costs, followed by Columbia, S.C., Knoxville, Orlando, and Lexington, Ky. Southern cities dominate lowest startup costs ranking

In the winter quarter, published its ranking of the cities with the lowest business startup costs. To create the ranking, SmartAsset collected data on the typical costs of starting and running a business in 81 of the largest U.S. cities. Chattanooga was named the lowest city for startup costs, followed by Columbia, S.C.; Knoxville; Orlando; Lexington, Ky.; Little Rock; Greensboro, N.C.; Memphis and Louisville. The only city outside the South to make SmartAsset’s top 10 was Wichita.


Multi-decade migrationto the South has resumed

Americans are heading to the South again en masse now that the economy — particularly residential real estate — has improved. Between 2014 and 2015, 1.4 million people, mostly from the Northeast and Midwest, migrated to Southern states. The gains in the South represent the largest annual growth of any year in the last decade. Census data showed that people seeking more affordable housing and jobs were behind two-thirds of the moves made between 2014 and 2015.  


Getting closer to full employment

Even though some large companies are cutting spending, there are signs from the winter quarter that indicate full employment is achievable this year. A report in February from the Labor Department showed that voluntary job quits rose to 3.1 million, the highest level since December 2006. The quits indicate that companies are now being forced to pay higher wages to keep key employees.


February adds to longest consecutive job gain record

In February, the U.S. added 242,000 jobs, the 65th consecutive month of job growth in the U.S. That is by far the longest consecutive month of job growth in U.S. history, surpassing the 48-month streak from 1986 to 1990 17 months ago. Over 13 million jobs have been added to the U.S. economy since 2010 without suffering a negative month.


Manufacturing jobs spiked in January

The Bureau of Labor Statistics reported in the winter quarter that manufacturers in the U.S. added 29,000 workers in January. Of 79 manufacturing sectors, 64 percent added workers. The surge in employment in January helped manufacturing reach a seven-year high of 12.4 million workers in the U.S.


Union membership growing in the South

While union membership in South Carolina dropped to the lowest level in the country in 2015, union membership rose in the 15 states combined that are covered by SB&D. The number of organized workers grew from 2.2 million or 5.2 percent of the workforce in 2014, to 2.4 million, or 5.5 percent of the workforce at the end of 2015 in the South. 


West Virginia becomes 26th right to work state

A majority of U.S. states now have right to work laws now that West Virginia became the 26th state to pass the legislation this winter. The Republican dominated state legislature overrode Dem. Gov. Earl Ray Tomblin’s veto of a right to work bill in February.


D-FW is the “most competitive” job market

The Dallas-Fort Worth metro area added 112,829 jobs between 2014 and 2015, surpassing expectations by 44,871 jobs. That made it the “most competitive” of the 150 largest metro areas in the U.S. CareerBuilder ranked metros in the U.S. based on the number of jobs created above and beyond what was forecast from 2014 to 2015. San Jose, Los Angeles, Seattle and Miami made up the ranking’s top five most competitive markets. Atlanta, Orlando, San Francisco, Riverside, Calif., and Charlotte made up the ranking’s top 10.


Toyota CEO Jim Lentz said that 75 percent of its 4,000 headquarter employees in California will make the move to the company’s new headquarters being built in Plano, Texas. Majority of Toyota employees will make the move to Plano, Texas

Toyota CEO Jim Lentz said in January that 75 percent of its 4,000 headquarter employees in California will make the move to Plano, Texas when the company moves into its new headquarters there. The company asked all of its current headquarter employees to make the move to West Plano, where the Japanese automaker is building its new 2 million-square-foot North American headquarters. According to Lentz, one of the main reasons the company is relocating its headquarters is the lack of affordable housing in California for its workforce. The facility is expected to open in February 2017. For more information about the South’s automotive industry, turn to the news section in this issue.


Plano, Texas named best city to find a job

In the winter quarter, WalletHub named Plano, Texas as the No. 1 city in the U.S. to find a job. Austin and Irving, Texas also made the website’s top 10.


Five Southern cities make “Top Ten Cities for Creatives”

New Orleans was ranked the No. 1 city for creatives by the website SmartAsset. The ranking was based on cost of living and the concentration of creative workers in 28 professions. Also making the top 10 in the South were Austin, Nashville, Durham and Kansas City.


Kentucky, Arkansas top nation in reducing uninsured

Data provided by the Gallup-Healthways Well-Being Index showed that from 2013 to 2015, Kentucky and Arkansas saw the sharpest decline in the percentage of residents without health insurance. Both states saw their uninsured rate drop by 12.9 percent during that time.


Private sector employment grew four times greater than government in 2015

Weak government job creation continued in 2015 as the sector only grew by one-half of one percent. There are 470,000 fewer government workers than peak levels in 2008. At the same time, private sector employment grew four times faster than government employment in 2015.


Atlanta is the best city for web developers

Austin-based named Atlanta as the best city in the U.S. for web developers. The blog based its ranking on average annual salary, median home prices, rents and job availability.


Another Chinese acquisition of a major employer in the South

Haier, the first Chinese company to locate a plant in the United States 15 years ago, acquired GE Appliances in the winter quarter for $5.4 billion. It’s another in an increasing line of acquisitions and emerging number of greenfield projects in the South by Chinese companies. Just five years ago, the Chinese were no-shows when it came to investing in the U.S. Today, some economists are predicting that China will soon be the South’s and the nation’s No. 1 foreign direct investment source. GE Appliances is headquartered in Louisville, where the company operates its largest plant with more than  6,000 workers.


In the winter quarter, Gallup ranked Orlando as the No. 1 U.S. market for job creation in 2015. Orlando is No. 1 for job creation says Gallup

In the winter quarter, Gallup ranked Orlando as the No. 1 U.S. market for job creation in 2015. Fifty-three percent of employers in the Orlando metro said they were expanding and hiring, and 8 percent said they were cutting jobs, creating a score for Orlando of +45. Austin placed second with a +43 score, followed by Salt Lake City, Louisville and San Francisco.


Georgia named No. 1 for racial progress

According to WalletHub, Georgia is the No. 1 state in the nation for racial progress. The website compared 10 key metrics — including voter turnout, median annual income, changes in the poverty rate gap and homeownership rates — to choose the states that have achieved the most racial progress.


Solar jobs top oil extraction jobs for the first time

A report that came out in the winter quarter by the Solar Foundation pointed out that for the first time, the solar energy industry employs more workers than the oil and gas extraction industry. According to the Bureau of Labor Statistics, as of December 2015, solar employed 209,000 workers, and oil and gas extraction employed 185,000 people. Solar jobs grew by 20 percent, 12 times faster than the overall economy in 2015.


New Orleans, Louisville named two of 15 best cities in the world for food

From the South, New Orleans and Louisville made’s “15 Best Cities in the World for Food” ranking. The only other U.S. city making the list was San Diego. Some foreign locations cited in the ranking included Tokyo, Lyon, Marrakesh, Copenhagen, Bologna and Florence, Italy.


Last year the Kentucky Bourbon Trail saw 900,000 visits to distilleries in the Commonwealth, double the number of visitors the Trail saw five years ago. Kentucky Bourbon Trail sees 900,000 tourists

Last year, the Kentucky Bourbon Trail saw 900,000 visits to distilleries in the Commonwealth, double the number of visitors the Trail saw five years ago. Several of the distillers on the Trail, including Woodford Reserve and Wild Turkey, have visitor experiences.


North Carolina’s population reaches 10 million

According to the U.S. Census Bureau, North Carolina’s population topped 10 million in the winter quarter. The Tar Heel State’s population is the ninth largest in the country, and only Texas, Florida and Georgia’s populations are larger in the American South.


Florida’s population tops 20 million

New Census numbers show that Florida, which recently passed New York in population, has reached the 20-million mark. Only California (39 million) and Texas (almost 28 million) have larger populations in the U.S. In 2015, Florida averaged adding about 1,000 people a day.


Job growth at record high in Florida

Since the fall of 2010, Florida has created just over 1 million jobs. The Sunshine State created 240,000 jobs in 2015 and for the first time since the Great Recession, nonfarm employment in Florida topped 8 million jobs. As of January, estimates by Florida TaxWatch show that Florida has surpassed the all-time high of nonfarm employment of 8,150,200.


Virginia’s employment level at record high

In the winter quarter, employment in Virginia reached 3,848,000, the highest level in the Commonwealth’s history. The unemployment rate in Virginia is near 4 percent, and in December, unemployment claims were at their lowest level in 41 years, according to the governor’s office.


South Carolina’s record employment

In 2015, job growth in South Carolina set a record with 71,202 new jobs. Total employment also set a record at 2,137,000. 


In 2015, Kentucky gained manufacturing jobs for fifth consecutive year

Led by the automotive industry, the Commonwealth of Kentucky added manufacturing jobs for the fifth straight year in 2015. Kentucky has added almost 18,000 manufacturing jobs since 2010. The state is home to 4,924 manufacturers employing almost 300,000 workers.


Tennessee’s governor and Tennessee Promise

Gov. Bill Haslam’s effort to get 55 percent of Tennesseans equipped with a college degree or certificate by the year 2025 is lagging a little as it enters its fourth year. Called “Drive to 55,” the effort got a big boost last year with the implementation of Tennessee Promise. That scholarship program provides two years of tuition-free community or technical college to Tennessee high school graduates. In January, Tennessee launched an advertising campaign called Reconnect and Complete. The new campaign targets 110,000 Tennesseans between the ages of 25 and 64 who have dropped out of college since 2007, but are more than halfway through earning their degrees.


In the winter quarter, Airbus completed the assembly of its first U.S.-built aircraft at its Mobile, Ala., facility. Airbus completes assembly of first plane at its new plant in Mobile, Ala.

Airbus, the European aircraft giant, rolled out the first plane from its new $600 million plant in Mobile, Ala., in the winter quarter. The company expects to build four or five aircraft per month at the Alabama facility. The first A321 model is being delivered to JetBlue.


Nashville leads U.S. in STEM pay

From 2013 to 2014, Nashville had the highest income growth in STEM jobs among 54 of the largest U.S. metros according to Payrolls for science, technology, engineering and math fields rose 5.3 percent in Nashville in that year. The national average was 1.6 percent.


Travel + Leisure names Nashville destination of the year

Tourism is big in Nashville and a prominent publication’s readers noticed. Voters in Travel + Leisure’s readers’ poll named Nashville as 2015 Destination of the Year. Nashville beat out Charleston, S.C., for the No. 1 spot.


Alabama company first to land plant deal in Cuba in 50 years

Alabama-based Cleber LLC, a manufacturer of small tractors, received federal approval to open a plant in Cuba. Cleber is owned by two former IBM executives who worked in the Research Triangle. The company will build an assembly plant in the Mariel Special Economic Development Zone, an industrial park for foreign companies that’s located adjacent to a new port west of Havana. The parts will be made in Alabama and the tractors assembled in Cuba. The tractors will be used by Cuba’s 70,000 non-government farming co-ops and small independent farmers, many of which still rely on animals to plow their fields. The plant is the first for a U.S. company since the Cuban revolution and the subsequent U.S. trade embargo more than 50 years ago.


Atlanta’s airport first to see 100 million passengers

A passenger on a flight arriving from the Gulfport/Biloxi International Airport on December 27 was the 100 millionth passenger served by the Hartsfield-Jackson Atlanta International Airport in 2015. It was the first time any airport in the world saw 100 million passengers in a single year.


Tennessee setting up recruiting offices in Germany, Italy and China

Randy Boyd, Commissioner of Tennessee’s economic development department, announced in the winter it will set up corporate recruiting offices in Germany, Italy and possibly two in China.


Austin is the U.S. capital for millennials

A study done by Headlight Data showed that Austin is the nation’s No. 1 market for millennials, or those between the ages of 25-34. Millennials made up 17.5 percent of the Austin area’s estimated
2 million residents, the highest rate among large U.S. metro areas. Baby Boomers also made up 17.5 percent of Austin’s population, down from 19 percent in 2009.


Two Southern states raise minimum wage

Arkansas and West Virginia, two of the South’s least populated states, raised their minimum wage on January 1, 2016. Arkansas raised its minimum wage from $7.50 to $8.00 an hour, and West Virginia raised its minimum wage from $8.00 to $8.75 an hour.


Boeing reaches milestone at its South Carolina Dreamliner plant

In the winter quarter, Boeing announced that the 100th 787-8 Dreamliner rolled off the assembly line at its factory in North Charleston, S.C. The first 787 built in South Carolina rolled out of Boeing’s 1.2-million-square-foot plant in April 2012. The plant houses about 7,000 employees.


Lockheed Martin completes 2,500th C-130 at Georgia plant

In the winter quarter, Lockheed Martin delivered its 2,500th C-130 Hercules aircraft from the company’s massive plant in Marietta, Ga. The U.S. Air Force took delivery of the first Hercules built in Marietta in 1956. C-130s are operated by 68 nations.


Three Southern cities make CNBC’s best places to retire top 10 ranking

Charlottesville, Va.; Sarasota, Fla.; and Plano, Texas made CNBC’s top 10 places to retire ranking. All three were cited for low cost of living, quality of life, and in Texas and Florida’s case, no state income taxes.


10,000 construction jobs to be created for ExxonMobil and Chevron Phillips’ new Houston area plants

ExxonMobil and Chevron Phillips are spending $5 billion each on two petrochemical plants in the Houston area. The two new facilities will require 10,000 construction workers at peak build out.


Austin tops Forbes’ “America’s Cities of the Future” ranking.

Forbes’ America’s Cities of the Future ranking saw six Southern cities make the top 10. The magazine ranked the 53 largest metro areas based on eight metrics, including the percentage of children aged five to 14, and net domestic migration from 2010 to 2014. Austin was ranked No. 1, and Raleigh, Houston, Dallas, San Antonio and Oklahoma City made the top 10.


Texas No. 1 export state for 2015, again

A Bureau of Economic Analysis report in the winter quarter ranked Texas as the top exporting state in the U.S. for the 14th consecutive year. Texas exported more than $251 billion in goods in calendar year 2015. Nationwide, exports totaled $2.2 trillion, down $112.9 billion, or 4.8 percent in 2015. Imports were $2.8 trillion, down $89.7 billion, or 3.1 percent.


U-Haul: North Carolina is No. 1 inbound state

U-Haul’s report titled “U.S. Growth States” showed that North Carolina posted the biggest net gain of one-way U-Haul truck rentals entering the state compared to those leaving in 2015. Virginia placed second and Florida was fourth.


Graduating rates in Alabama skyrocket

Alabama’s high school graduation rate climbed to all-time highs in 2014-2015, reaching 89 percent. That is up from 72 percent in 2012, according to the Alabama Department of Education.


Atlanta tops list of moving destinations

For the sixth year in a row, Atlanta topped Penske Truck Leasing’s annual moving destination ranking. Making the top 10 list in the South were Tampa Bay, Dallas-Fort Worth, Orlando and Houston.


Charlottesville, Va., No. 1 for startup investment

According to the National Venture Capital Association, Charlottesville has been the fastest-growing U.S. market for venture capital investment every year since 2010. The number of companies receiving venture capital funding in Charlottesville increased about 55 percent annually from 2010 to 2015.


Construction spending in 2015 highest since 2007

According to the Commerce Department, construction spending jumped 10.5 percent in 2015 to $1.1 trillion, the largest total since 2007. In 2015, home construction rose 12.6 percent and non-residential construction was up 12.0 percent.


Deals at deadline

Daikin Industries’ new Houston campus will employ up to 5,000 workers, 1,000 more than originally announced. The Japanese manufacturer of heating, cooling and refrigerant products is building a 3- to 4-million-square-foot campus in Hockley, Texas. The site will consolidate facilities of Goodman Global in Texas and Tennessee, the company Daikin purchased recently. Accenture Federal Services is expanding its Technology and Innovation Center in San Antonio. The project calls for 300 additional jobs. Hardee’s has relocated its headquarters from St. Louis to Nashville. About 75 employees relocated to the Music City. Agero, a roadside assistance provider, is setting up a new call center in Sullivan County, Tenn. The company is investing $3.5 million and hiring 585 workers. Job site, Indeed, has opened a new office in Austin. The 220,000-square-foot facility will house 1,000 employees. Conde Nast is opening a digital innovation center in Austin. The center will house 50 employees. Jacksonville-based FIS is expanding. The financial services firm will add 250 employees. A Canadian auto supplier announced in the winter it will move into an existing structure in Oxford, Ala. Kobay Enstel, which will supply the nearby Honda plant, plans to hire 75 workers in the move. California-based Golden State Foods broke ground on a new 165,000-square-foot meat processing plant in Opelika, Ala., in March. The $63 million facility will house 173 workers. Ernest & Young has chosen Jacksonville, Fla., for a client services center. Most of the 450 jobs will be staffed for IT and financial consulting. Pennsylvania-based Glatfelter, a paper and materials company, is investing $80 million in a plant in Fort Smith, Ark. The company will manufacture airlaid products. The project will create 83 jobs. RSI Home Products is building a new manufacturing facility in Richmond County, N.C. The company, a maker of kitchen and bath cabinets, will invest $18.3 million and hire 175 in the deal. Proper Polymers, a manufacturer of injected molded car parts, is building a new plant in Greenville, S.C. The company is investing $15.4 million in the facility that will house 87 workers. Sleepmade, a manufacturer of sleep products, is setting up a plant in Lowndes County, Miss. The project calls for a $1.4 million investment and 50 jobs.  

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