Around the South - Winter 2022

U.S. is officially energy independent
Remember the early 1970s and gas lines for miles? For decades, U.S. politicians have stressed that achieving energy independence was one of the most important goals for the nation’s economy. Now, for the first time, the U.S. produced more petroleum than it consumed in 2020, according to the Energy Information

U.S. creates a record 6.4 million jobs
In calendar year 2021, the U.S. created 6.4 million new jobs — or 537,000 new jobs per month — as the nation continued to recover from the job losses in 2020 from the pandemic. The other years making up No. 2 and No. 3 in U.S. job growth were in 2014 (3 million new jobs) and 2015 (2.7 million new jobs). In the first two months of 2022, the U.S. saw almost 1.2 million jobs created, an enormous total for 60 days. As of March, the nation is still not at its pre-pandemic point in February of 2020. The U.S. has 2.1 million jobs to go before hitting the February 2020 level and recouping all positions lost in the pandemic, the Bureau of Labor Statistics reported in March. It should be noted that the February job totals were collected prior to Russia’s invasion of Ukraine. Also in February, 36,000 new manufacturing jobs were created, compared to 16,000 in January.

Goldman Sachs: U.S. facing worst labor shortage since World War II
Economists with Goldman Sachs stated in the winter quarter that the U.S. economy is facing the worst labor shortage in close to a century, or since World War II. The company estimates that there is a shortage of 4.6 million workers in the U.S. This has sent wages rising as much as 5 percent this year, while consumer prices surged over 7 percent in January. There are over 10 million available jobs in the country as of February. Pre-pandemic available jobs were below 8 million.

U.S. population grew at a slower rate in 2021 than any time in U.S. history
The U.S. population grew at a slower rate in 2021 than in any other year since the founding of the nation, based on historical decennial censuses and annual population estimates. Based on U.S. Census Bureau data, the growth in population last year was 0.1 percent. It is the first time since 1937 that the U.S. population grew by fewer than 1 million people, featuring the lowest numeric growth since at least 1900, when the Census Bureau began annual population estimates. Several states, including New York, Illinois, California and Massachusetts, lost population in 2021. In the South, West Virginia, Louisiana and Mississippi also lost population last year.

Pandemic drives new business growth
New data released by the U.S. Census Bureau in the winter quarter showed that new business applications filed in calendar year 2021 set a new record. According to Census, 5.4 million new businesses were launched, surpassing the previous record of 4.4 million started in 2020.

Will China overtake the U.S. to become the world’s biggest economy? That is the subject of much debate.Experts: China’s GDP to overtake U.S. by 2030
Officials with the British consultancy Centre for Economics and Business Research (CEBR) published their predictions for the coming decade on U.S. versus China GDP. For decades, economists have predicted that the Chinese economy would have passed the U.S. economy, but that has not been the case so far. However, new data shows that the Chinese economy, based on gross domestic product, will surpass the U.S. by 2030.

Been to downtown lately? That’s the problem right there
COVID-19 has emptied many of America’s downtowns. With offices gone all-remote, estimates say that post-COVID will see as much as one-quarter of its pre-COVID workforce disappear from downtowns. That would leave some parts of cities, especially large ones, with big patches of closed businesses. . .from barbers, to clothiers, to restaurants. Yes, downtowns are in trouble. Office buildings anchor just about every economic aspect of central business districts, especially large transit systems. Less people working in those buildings means less taxes, less customers and unused major investments.

State revenues booming
The Urban Institute think tank reported in the winter that state revenues between April and November increased 24 percent from 2020 to 2021. According to the National Association of State Budget Officers, 32 states said collections for fiscal 2022 were ahead of projections. As a result, states are proposing tax rebates and pay increases for public employees.

Kentucky bourbon industry continues to soar
According to officials, the Kentucky bourbon industry poured $9 billion into the Commonwealth’s economy in 2021. The industry supports almost 23,000 jobs and $1.23 billion in annual payroll. Currently, the bourbon industry in Kentucky is undergoing a $5.2 billion capital investment binge and contributes $285 million in state and local tax revenue.

Kentucky to create hydrogen energy hub
The Commonwealth of Kentucky and Louisville Gas and Electric and Kentucky Utilities (LG&E and KU) have joined the Kentucky Energy and Environment Cabinet’s Hydrogen Hub initiative to make hydrogen a low-carbon solution for the future. Announced by Gov. Andy Beshear, Kentucky’s energy strategy is to become a hydrogen hub. The U.S. Secretary of Energy is expected to create several hydrogen hubs across the country with federal funding.

West Virginia to launch hydrogen energy effort
The West Virginia Hydrogen Hub Working Group held its first organizational meeting in the winter 2022 quarter. The group will develop a plan to submit to the U.S. Department of Energy to bring one of at least four possible hydrogen hub projects to West Virginia. Each hub is required to demonstrate the production of clean hydrogen and the use of clean hydrogen.

Working in Mississippi? You could get a $1,000 check
The state of Mississippi is awash in cash (a billion dollars over revenue estimates). Instead of tax cuts, Gov. Tate Reeves and other lawmakers in the state are recommending a one-time $1,000 rebate as opposed to tax cuts. Other states, both blue and red, are doing the same. 

Military and defense industry huge in Florida
According to the recently published 2022 Florida Defense Industry Economic Impact Analysis by the Florida Defense Support Task Force (FDSTF), defense spending in Florida was nearly $100 billion in the state in 2021. The total is mind boggling as it contributes 8.5 percent of Florida’s entire economy.

Atlanta’s airport traffic coming back
The world’s busiest airport is coming back from the collapse of the COVID-stricken year of 2020, when just 42 million passengers flew in and out. In calendar year 2021, the airport hosted 75 million passengers. That is still a far cry from the record 110 million passengers that used the airport in 2019. Delta remains the largest carrier by a long shot in Atlanta with an 80 percent market share. It has been 10 years since Dallas-based Southwest began serving Atlanta, and its market share is below 10 percent.

FAA approves commercial launch site in Southeast Georgia
A federal agency has granted a license for a launchpad that would fly commercial rockets from coastal Georgia. The Federal Aviation Administration’s approval of a launch site operator license for Spaceport Camden marks a significant milestone for the Georgia space project, though many reviews and permits are needed before any rockets can actually launch.

Germany-based Infineon Technologies is considering putting $700 million into its chip plant in Southeast Austin. Another new semiconductor plant expansion under consideration in the South
Germany-based Infineon Technologies is considering putting $700 million into its chip fabrication plant in Southeast Austin. The company, if the deal is approved, will invest $625 million in new machinery and additional space at the plant. Several large semiconductor plants have been announced in the South as manufacturers struggle to find enough computer chips for automobiles, smart phones and other products. The chip shortage in the automotive industry is expected to cost $210 billion in revenue and has increased car prices by more than 10 percent in the last year. . .over 7 million vehicle units will not be built this year.

South Carolina exports near $30 billion in 2021
The South Carolina Department of Commerce and the SC Ports Authority announced in the winter that the Palmetto State’s exports totaled $29.7 billion last year. South Carolina is the nation’s largest exporter of tires and fully assembled automobiles.

Port of Charleston getting $250 million industrial park
Capital Development Partners, based in Savannah, Ga., has purchased 135 acres near the Port of Charleston’s newly opened Hugh K. Leatherman Terminal for $65 million. The Savannah company plans to develop Shipyard Creek Logistics Center, an industrial park exceeding $250 million in value. Construction will start immediately, with delivery expected in 2022.

TVA launches new nuclear program
Tennessee-based TVA, the nation’s largest public utility, is launching a program to develop small modular nuclear reactors as part of its strategy to dramatically reduce greenhouse gas emissions. The company will spend $200 million in the program’s first phase.

What a year for Tennessee
The year 2021 was historic for Tennessee when it comes to large-scale economic development projects. Leading the way was the Oracle announcement in Nashville that will eventually create 8,500 jobs. The other mega-deal came from Ford Motor Company and the creation of the Blue Oval City just east of Memphis. That $5.7 billion project will create 5,800 to 6,000 jobs.

Clarksville, Tenn., ranked high for quality of life
Clarksville, Tenn., located northwest of Nashville, was ranked in the winter by San Francisco-based real estate company as the most “desirable zip code in America.” Tiny Clarksville beat out Austin, Atlanta, Orlando and Nashville among others. The ranking was based on location, amenities and cost of living.

Largest private project in Arkansas history breaks ground
In the winter quarter, U.S. Steel broke ground on a new $3 billion steel mill in Osceola, Ark., that will bring thousands of jobs to Northeast Arkansas. The steel mill will be the most advanced in the world and is expected to produce automotive parts such as hoods and roofs that are not available with current steel-making technology. 

Nucor is the latest steel plant to call the South home
Charlotte-based Nucor is bringing a new steel plant to West Virginia, but as of this writing, no site in the state has been chosen. Once operational in 2024, the mill will have the capacity to produce up to 3 million tons of sheet steel per year for the automotive, appliance, HVAC, heavy equipment, agricultural, transportation and construction markets, according to the steel products manufacturer. The new plant will feature an advanced high-end automotive line.

The U.S. airline industry, including both passenger and cargo airlines, added over 728,000 workers in December 2021. Wow! Big job gains in the airline industry last month of 2021
The U.S. airline industry, including both passenger and cargo airlines, added over 728,000 workers in December 2021. That is nearly as many jobs as were created pre-COVID December 2019, when 749,000 jobs were created. In December, U.S. cargo airlines employed 283,000 workers and passenger airlines employed 445,000.

South Carolina Ports, Port of Virginia: Record volumes in 2021
South Carolina Ports had its best calendar year in history in 2021 with an unprecedented amount of cargo. SC Ports handled 2.75 million twenty-foot equivalent container units (TEUs) at Wando Welch Terminal, North Charleston Terminal and Hugh K. Leatherman Terminal in 2021. That was nearly a 20 percent increase from 2020. The Port of Virginia in Norfolk handled more than 3.5 million twenty-foot equivalent units in 2021, a 25.2 percent increase from 2020.

New Alabama rail corridor to help fix supply chain
The new “Alabama-USA” rail corridor, a $231 million program of rail projects, will help solve some of the nation’s supply chain issues. The Port of Mobile is one of the fastest growing container ports, and the new container development in Montgomery will open up many opportunities for companies like Mazda Toyota, Hyundai and the AM/NS steel mill north of Mobile. The first phase of the “Alabama-USA” rail corridor, costing $71.6 million, will focus on the rail connection to the McCalla Intramodal Facility near Birmingham.

Largest incentive package in Texas history
The incentive package agreed upon between the state of Texas, local governments and Samsung for its new semiconductor plant in Taylor is the largest in state history. Taylor is located near Austin where Samsung, the Korean chip maker, operates a multi-billion-dollar plant. Samsung will invest $17 billion in the next-generation semiconductor factory in Taylor. . .that figure is also the largest foreign direct investment in Texas history. The incentive package Samsung will capture will be nearly $1 billion.

Dallas-Fort Worth led the nation in investment property deals
Dallas-Fort Worth led all markets in U.S. real estate transactions in calendar year 2021. Transactions totaled $47 billion last year, more than doubling the 2020 totals. Only New York City has ever topped $47 billion in sales.

D-FW tops all in industrial space construction
A new report from Cushman & Wakefield showed that the Dallas-Fort Worth area has left everyone else in the dust in new industrial building construction. In 2021, more than 50 million square feet of new warehouse, distribution and logistics buildings were under construction in North Texas. The Dallas-Fort Worth market is seeing unrivaled low vacancy and incredibly high demand for industrial space, and demand is out-pacing supply. 

Dallas-Fort Worth ranks No. 1 for moves
According to a new annual report by real estate firm Zillow and Allied Van Lines, the Dallas-Fort Worth MSA ranked No. 1 as the top 2021 destination for people relocating from other parts of the country. Most of the migrants to D-FW were from Los Angeles, Chicago and Phoenix. Charlotte and Sarasota, Fla., joined Dallas-Fort Worth as the top three inbound markets.         

Record rural Texas land sales
Buyers of real estate in Texas are purchasing rural lands at a record pace, as a shortage of available properties crops up in the state. Statewide rural land sales were up almost 18 percent in 2021. Rural property purchases set a record despite a downturn in the final months of the year, according to a new report from the Texas Real Estate Research Center at Texas A&M University. It is, according to the source, the most active period in Texas land sales in history.

North Carolina tobacco farmers fear loss of generational crop
For 400 years, North Carolina has grown the best leaf tobacco of any place in the world. That may be ending. Flue-cured tobacco was the top crop in the Tar Heel State and just about every farmer planted at least a few acres because it paid the bills. Economic development as it was known early on in North Carolina depended heavily on tobacco, as huge manufacturing plants in Winston-Salem and Durham employed tens of thousands of people and provided billions in tax dollars to build schools and other infrastructure. Those days, for the most part, are gone. China was the state’s largest buyer of leaf tobacco, but from 1997 to 2017, during which “big tobacco” agreed to pay billions to states for healthcare costs and the government dismantled the tobacco price-support system, North Carolina’s annual production dropped almost in half, from about 700 million pounds to about 364 million pounds. Now China has found cheaper sources of tobacco from other places such as Brazil and Turkey.

Tampa named hottest housing market by Zillow
According to the new Zillow analysis, the hottest housing market in the U.S. will be Tampa, Fla. Zillow expects the housing market to slow somewhat in 2022 and 2023 because of rising prices and other factors. Zillow’s top five real estate markets for this year are all from the South, including Jacksonville, Charlotte, San Antonio and Raleigh.

Jason El Koubi, president and CEO of Virginia Economic Development Partnership, wants more investments in large industrial sites.New CEO of Virginia Economic Development Partnership wants more investments in large industrial sites
Jason El Koubi, the former executive vice president at the Virginia Economic Development Partnership and now president and CEO of VEDP, said in the winter quarter that the Commonwealth needs shovel-ready sites to land large projects like those announced in the South during the last six months of 2021. El Koubi was referring to the electric vehicle and battery plants announced in Georgia, Kentucky, Tennessee and North Carolina. In an article in Virginia, El Koubi was quoted as saying, “The cost of not investing in site development has become very clear and very alarming.”

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