Regional Report: The Southeast

SOUTH CAROLINA | #7 | GROWTH PACE SLOWS

South Carolina’s robust growth this decade, which Wells Fargo economist Mark Vitner calls “an astonishing run of economic development” has begun to slow. Since 2010, “every year has been better than the year before; but in 2016, the acceleration tapered off,” says Joseph Von Nessen, a research associate at University of South Carolina’s Darla Moore School of Business.

Even so, nonfarm employment grew 3.3% last year, creating thousands of manufacturing jobs and landing scores of international companies. Nearly 8% of residents work for overseas entities, the nation’s second-highest rate. Tire manufacturing is now the Palmetto State’s biggest cluster; Giti Tire is building a $560 million manufacturing factory in Chester County, and Trelleborg opened a tire manufacturing plant in Spartanburg. Professional and business services have grown by nearly a third since 2010; leading sector growth; leisure and hospitality and manufacturing follow at 17.2% and 16.5% respectively. International trade keeps expanding; goods exports totaled $30 billion over the past year, up 11% from the 12 months ending in March 2015.

Charlotte’s charm and quality of life attract Millennials and empty-nesters. Jobs follow; one of every four payroll spots created between 2009 and 2014 was in metro Charlotte, three counties of which are in South Carolina. Addressing infrastructure, the Port of Charleston began a $509 million dredging project designed to make it the deepest harbor on the East Coast. The Myrtle Beach-Conway-North Myrtle Beach metro area, on the border of the two Carolinas, ranked second nationally in population growth.


VIRGINIA | #12 | JOB CREATION DOUBLED

Virginia doubled its pace of job creation last year, adding 83,000 new jobs during the 12-month period starting April 2015 versus 41,500 last year. Most were headquarter jobs, which outpaced manufacturing posts more than 2 to 1. Despite the surge, once-robust Virginia still trails the nation in payroll expansion. Real GDP grew a tepid 1.3% over the four quarters through Q3 2015, besting only Alaska (51st) and Mississippi (50th). Key projects included Bechtel’s $149 million Fairfax headquarters, Wells Fargo’s 500-job operation in Roanoke and ADP’s 1,800job project in Norfolk.

Launched this spring, the Virginia Growth and Opportunity Board—call it Go Virginia—aims to depoliticize corporate recruitment and training programs while encouraging collaboration between regional business, education and community leaders. Its initial budget is $35 million. In July, a new $12.5 million state-financed training program was set to begin credentialing tech workers. This summer, the state began funding a $29 million IT program to commercialize research at public institutions. In infrastructure improvement, a $350 million bond package was passed to fund expansion of the Port of Virginia.


ALABAMA | #20 | PUSHING FOR ECONOMIC GROWTH

Alabama continues struggling to regain pre-Recession job growth and salary levels. Since February 2010, the national low point for private-sector employment, the Yellowhammer State added over 114,000 jobs for a 7.7% increase, well below the national 13.6% average. Due to weak employment growth, nearly one quarter of the state’s work force is underemployed, according to the University of Alabama’s Center for Business and Employment Research. That figure rises to 28 percent in the Montgomery area.

Business and professional services pace job creation, but lower-paying jobs in restaurants and bars came in second. Auto manufacturing, the muscle in the state’s economy, ranked third. Workforce development and education infrastructure remain “concerns of almost every company,” says Jim Searcy, executive director of the Economic Development Association of Alabama. Business leaders call for more alignment between school curricula and employer needs.

One positive economic development sign was the passage last year of a new incentive package designed to attract manufacturers; the program is “making a difference” in recruiting manufacturing companies, says Betty McIntosh, Atlanta-based senior managing director of Cushman & Wakefield’s Business Incentives practice.


KENTUCKY | #24 | MANUFACTURING EXPANDS

Led by a booming manufacturing sector expanding at three times the national rate, Kentucky continues to create jobs. Toyota’s decision to open a new Lexus line in Georgetown enhanced the state’s auto-building appeal. About 56% of new jobs are in the Louisville and Lexington areas, the Bluegrass State’s two largest metros. The economic corridor linking the cities, jumpstarted by the Bluegrass Economic Advancement Movement, or BEAM, seeks to leverage the momentum of such multinationals as Toyota, Ford, Raytheon, Lexmark, GE and Lockheed Martin.

Professional services, education and healthcare sectors are thriving; manufacturing and housing are also doing well. The income divide between cities and rural areas continues to grow, while farming and coal mining decline. The state budget passed in April reduced serious pension underfunding, but it did so largely by slashing higher-education monies 4.5%.

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