Best & Worst States for Business Regional Report: The Southeast

While the Southeast is sometimes overlooked in national conversations about economic development, it is a powerhouse of manufacturing economic growth, home to two of the country’s fastest-growing state economies and lures investment with a low cost of living and engaged workers.

 #15 VIRGINIA: A Global Data Center
Home to more than 4.5 million square feet of data center space, Virginia is a transit point for 70 percent of the world’s Internet traffic and is the largest data center market in the U.S. Amazon Web Services recently announced a new corporate campus in Herndon, adding 1,500 new jobs to the 7,000 workers it already employs in the state. Leading tech company IOMAXIS also plans to add more than 500 jobs over the next three years to support its mission to thwart cyber threats. “To stay ahead of that challenge requires a talented, diverse workforce and policies friendly to small companies seeking to grow rapidly. Virginia provides these things,” said Bob Burleson, CEO of IOMAXIS.

Stephen Moret, CEO at the Virginia Economic Development Partnership, says the state also has robust manufacturing and finance sectors. There are roughly three dozen Fortune 1000 companies headquartered in the state, including Capital One, Freddie Mac and Northrop Grunman. Nestlé USA announced in February that it would move its headquarters from California to Arlington. “Virginia is a quiet state and doesn’t always make itself known, but it’s a place where the world’s leading brands do business,” Moret says.

While Virginia’s economy is branching into new directions, a large portion of it is still linked to government-related activity that can be susceptible to federal spending slowdowns. “Our single biggest sector is business related to the federal government so we’re trying to focus more attention on diversifying economic growth and other parts of the economy,” Moret says.

Aerojet Rocketdyne launched a state-of-the-art production plant in Huntsville, where it plans t build its next-gen rocket engine.

#19 ALABAMA: Highly Engaged Workers Fuel Manufacturing
A recent Gallup survey found that Alabama has the most engaged workers of any state in the country. Thirty-seven percent of Alabama workers said they were “highly involved in and enthusiastic about their work and workplace.” This excitement is being fueled by workforce investments, strong economic growth and an influx of high-paying jobs.

In January 2017, Alabama initiated its Accelerate Alabama 2.0 program to focus on trends in advanced manufacturing and other sectors. It identifies recruitment and retention initiatives, and the state has restructured seven new regional workforce councils made up of companies and educational institutions in those regions. “[Accelerate Alabama 2.0] is providing a lot of value-added services to companies that are either expanding or relocating here for the first time as an incentive,” says Greg Canfield, Alabama secretary of commerce. “We recruit workers and provide pre-employment screening and training at no cost.”

The National Association of Manufacturers recently named Alabama one of the top five states for manufacturing growth. Canfield says the sector now generates 17 percent of state GDP. Last year, Alabama hit a new annual record of $1 billion in manufactured good exports. In late-June, Jeff Bezos’s space company, Blue Origin, announced a $200 million investment in a 200,000-square-foot plant to build its BE-4 rocket engines. In April, Aerojet Rocketdyne announced it would construct a facility in Huntsville to produce its next-generation rocket engine. Eileen Drake, CEO, said Huntsville was a “logical choice” to locate production of its new AR1 engine due to the “top-tier talent” in the area.


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