2015 Regional Report: The Southeast

The Bluegrass State continues its creaky rebound from the Great Recession, led by Lexington and Louisville. The pair of cities, increasingly collaborative, accounted for 45 percent of the state’s job growth over the past five years, according to economist Paul Coomes. Manufacturing payrolls rose 1.8 percent last year. Meanwhile, hiring in such areas as retail, financial services and government was flat. Toyota’s $531 million Lexus plant expansion in Georgetown, announced in 2013, continues to command local attention; it could open later this year.

Kentucky’s bedrock coal industry has been hammered by falling energy prices. This year, real GDP growth will again lag that of the U.S. overall, says Christopher Bollinger, director of the Center for Business and Economic Research at University of Kentucky. Bollinger forecasts 2 percent GDP growth in the state. The Tax Foundation ranks Kentucky’s tax burden 23rd highest and ranks its business tax climate 26th. Kentucky spends over $1.4 billion a year on incentive programs.

“The economy in Mississippi is “better than it has been in a long time.”

iStock_000014589845_SmallMississippi’s economy continues to lag. The state added 8,800 jobs last year, nearly a third in transportation and utilities. Still, employment remains nearly 40,000 jobs under the state’s 2008 peak. Casinos, once hailed as an economic driver, now represent a poor bet. Real Gross Domestic Product is currently pegged at 1.4 percent, although it’s slated to rise next year by 2.1 percent, forecasts the Mississippi University Research Center. State economist Darrin Webb professes optimism. The economy overall is “better than it has been in a long time,” he testified earlier this year to the state legislature.

A small state, Mississippi offers excellent resources to companies that seek them out, including Nissan and Toyota, according to Cushman’s McIntosh. “There is a perception problem,” she says. “The officials I’ve worked with have gone all out for the projects I’ve been involved with.”

The Tax Foundation ranks Mississippi’s tax burden 11th lowest and ranks its business tax climate 18th. The state spends over $416 million per year on incentive programs.

The Mountain State offers a mixed bag of economic news. John Deskins, director of the Bureau of Business & Economic Research at WVU, forecasts an uptick in employment growth, income growth and employment through end of decade. West Virginia will, however, still lag the nation in employment, income and population growth over the next five years. The state’s mining industry, its longtime economic driver, is bleeding revenue and jobs and no new sectors have emerged to replace it, keeping per capita income in the state mired near the national bottom. Modest growth of professional and business services, education and health services “will pace the state’s overall performance over the next five years,” says Deskins.

The Tax Foundation ranks West Virginia’s tax burden 19th highest and ranks its business tax climate 21st. West Virginia spends over $1.57 billion per year on incentive programs.