Regional Report: The Midwest
The Midwest continues to ride a wave of economic recovery momentum with bright spots in manufacturing. As in many parts of the country, the main challenge now is finding the labor to support the growth. (Number refers to state’s rank in the 2021 Chief Executive Best & Worst States for Business.)
#5 – INDIANADespite unprecedented challenges and uncertainty during the past year, 2020 was the Hoosier State’s fourth consecutive record-breaking year for economic development. Indiana received 282 commitments from companies seeking to locate or grow in the state, according to Jim Staton, SVP and chief business development officer of the Indiana Economic Development Corporation. These commitments will add up to more than $5.6 billion and 31,300 jobs over the next few years. “We’ve taken that momentum straight into 2021 with more commitments for location, growth and investment around the state and are on track to have another significant year in economic development,” said Staton.
One promising sector is manufacturing. In April 2021 alone, Indiana announced commitments from Amazon, Apple and Toyota with a total of more than $900 million capital investment and 2,900 jobs. The state now needs to keep the flow of talent to support the growth. In early May, Gov. Eric Holcomb launched the Indiana Regional Economic Acceleration and Development Initiative (READI), which will dedicate $500 million to encourage long-term sustainable investments to make regions across the state magnets for talent.
In a year when financial constraints led many states to scale back on economic development, Ohio made significant investments to move its economy forward, says J.P. Nauseef, president and chief investment officer at JobsOhio. He reports that the state has more than $15 billion allocated toward innovation, job-ready sites, growth capital, broadband access and more. The Buckeye State demonstrated the second-fastest recovery to pre-Covid-19 conditions in the region, and ranked No. 1 in manufacturing GDP in the Midwest, said Nauseef.
To further fuel the momentum, Ohio is positioning itself as a haven for those fleeing the costly coasts and seeking a business-friendly environment with a strategic location and high quality of life. “We believe Ohio is the best place to live, work and find your unique version of the American dream. It’s a place where you don’t have to make a choice between success in your business or professional endeavors and your community or family endeavors,” he said.
The Mount Rushmore State continues to attract new expansions and groundbreakings with its pro-business policies and tapered response to the pandemic. United States Bureau of Economic Analysis (BEA) data from March 2021 found the state was growing faster than any other in the nation with an annual rate of 9.9 percent in the fourth quarter of 2020. “Because of the unique approach that we took to the virus, we’ve set our economy up for tremendous growth, both in the short-term and long into the future,” said Gov. Kristi Noem.
Furniture Mart USA announced in June 2021 it will nearly double its corporate headquarters and distribution center in Sioux Falls. Nordica and Lineage Logistics are also expanding at Foundation Park in northwest Sioux Falls, with hundreds of thousands of square feet in distribution space. The area sits at the intersection of two major interstates and is attracting new projects with ready infrastructure to accelerate building. Amazon currently has a new fulfillment center under construction, and CJ Foods is preparing to break ground on a food processing facility in the park. “What we’re seeing in terms of our development pipeline is interest from bigger users looking for larger parcels and planning more square footage than we’ve historically seen in Sioux Falls,” said Dean Dziedzic, vice president of economic development at the Sioux Falls Development Foundation.
The Great Lakes State is committed to building a “championship economy,” not just for Detroit but for citizens in all regions of the state, said Quentin Messer, CEO of the Michigan Economic Development Corporation. MEDC takes a holistic approach that fosters development by first attracting talent with places for people to live, work and play.
In October 2020, Perrigo, a leading provider of self-care products, announced a new North American corporate headquarters in the heart of Grand Rapids. It will be constructed in Michigan State University’s Grand Rapids Innovation Park, a public-private partnership that brings together academic medicine, healthcare delivery and other partners aiming to transform health. And while there’s excitement around the growth of the electric vehicle industry in neighboring states, “you’re not going to pry the automotive sector from Michigan,” Messer says. “Just because you see that transition to EV and fuel cells, trust and believe that Michigan is going to be able to compete. We still have the highest concentration of engineers in the country.”
Des Moines’ cluster base of insurance and financial services companies helped pull Iowa through the pandemic better than many other states, said Jay Byers, CEO of the Greater Des Moines Partnership. Iowa’s state capital was recently featured in The Wall Street Journal as one of three breakout cites on the forefront of America’s Economic Recovery. “Mid-sized cities like Des Moines have been highlighted by experts as large enough to attract world-class industries but at the same time smaller than metro areas with less congestion, more affordability and the things people are looking for,” said Byers.
With strong rail and road access, the city is also doubling down on its distribution strengths with the Des Moines Industrial Transloading Facility. It is on track to be operational by late 2021 and will serve as a place to transfer bulk materials between semi-trailers and trains. Developers say it will help make the region more attractive as a distribution hub with flexibility and reduced shipping costs.
Despite the challenges of the past 18 months, the Show-Me state continues to attract new projects in several key sectors. Swift Prepared Foods announced in April 2021 251 new jobs at a $200 million production facility to be built in Columbia. In June, Niagara Bottling announced nearly 100 new jobs at a $156 million production facility in Kansas City. That same month, advertising company Avocado announced more than 100 new jobs in St. Louis with an average annual wage of more than $81,000. And in July 2021, Deli Star Corporation announced 475 new jobs at a new $99 million headquarters in St. Louis.
There’s also growing excitement in the state’s entrepreneurial ecosystem. Missouri Technology Corporation, a public-private partnership created by the Missouri General Assembly to promote entrepreneurship and the growth of high-tech companies, announced in August 2021 a statewide initiative with TEConomy Partners, LLC to support innovation.
Wisconsin landed several new projects in manufacturing and distribution. E-commerce fulfillment and distribution company Geneva Supply converted a 385,000-square-foot warehouse in Wilmot in July 2021 with plans to hire at least 100 employees. Manufacturer IRIS USA expanded its facility in Pleasant Prairie with plans for 90 new jobs over the next three years. Heartland Produce also broke ground on a $29 million headquarters and distribution facility in Kenosha.
In July, Gov. Tony Evers announced a $130 million investment into solutions to help address the state’s post-pandemic workforce concerns. Recognizing there is “no one-size-fits-all solution” to meet workforce needs, the program seeks customized options for unemployed workers, businesses and community leaders. “These programs will allow us to invest in regional solutions, help businesses find workers and provide support to our friends and neighborhoods who are getting back on their feet.”
At a meeting in mid-August, Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana, said niche industries are helping drive a healthy post-pandemic recovery. Montana’s non-traditional industries, like bioscience, biotech, technology development and manufacturing, are now growing faster than many others. Biotech, for example, is now a $2.9 billion industry and growing at a pace of 7 percent per year.
The state’s continued recovery now depends on the ability to find labor. In May 2021, Gov. Greg Gianforte announced a return-to-work bonus program that utilizes federal funds authorized by the American Rescue Plan Act and offers $1,200 to unemployed individuals who rejoin the labor force and accept steady payments for employment at least once a month. “Our continued recovery depends on continuing these positive trends, so our businesses can meet their growing customer demand,” said Gianforte.
Nebraska currently has one of the lowest unemployment rates in the nation, and the state’s manufacturing employment has surpassed pre-pandemic levels and reached the highest point since the Great Recession. “While this strong growth has led to plenty of opportunities, it also presents a challenge for businesses that are looking to grow. Companies are having difficulty hiring people to fill all of the jobs they’re creating,” said Gov. Pete Ricketts in a press release.
The state is building a talent pipeline to help prepare students for high-wage, high-demand careers to address the issue. It starts in middle school with the Developing Youth Talent Initiative (DYTI) to familiarize kids with jobs in fields like manufacturing and engineering. Students can participate in career academies and apply for Nebraska Career Scholarships, which offset tuition for college students in fields like engineering and IT. The state is also partnering with local companies to offer a variety of high school and college apprenticeships that allow students to gain skills while earning an income. Since January 2020, the number of Registered Apprenticeships has grown by 14 percent. “To keep our growth going, we will find innovative ways to develop our people so they can take some of the thousands of great-paying jobs right here in Nebraska,” said Ricketts.
The Sunflower State has several new announcements in its key sectors of manufacturing and agriculture. Airxcel, a company that makes HVAC products for recreational vehicles, announced in June 2021 an expansion that will support 365 new jobs. In August 2021, Brek Manufacturing Company announced 75 jobs at a development in Wichita. Communications Solutions, a call center service company, also announced 250 new jobs in Emporia.
Kansas also has exciting news in the pet health industry. Hill’s Pet Nutrition, which cut the ribbon on an innovation center in Topeka in July 2021, announced a $250 million facility to be created by 2025. The state’s Animal Health Corridor is now home to the single largest concentration of animal health interests in the world, with 300 companies researching veterinary pharmaceuticals and food for pets and livestock.
Like many other rural states in the Midwest, the outmigration of talent and young people remains a challenge. To help strengthen the workforce and economy, the Kansas Sampler Foundation’s Power Up & Go project aims to identify and address needs in rural areas. “My administration will continue prioritizing the key issues identified—such as childcare, broadband expansion and affordable housing—along with keeping our state welcoming and inclusive for all to support our rural and young Kansans,” said Gov. Laura Kelly.
Wind power and aviation are helping the Sooner State recover from the national fallout related to the Covid-19 pandemic. Carter Wind Turbines announced in April 2021 a $10 million capital investment and plans to add more than 300 employees over the next five years. In June, North Star Scientific reported plans to add 50 employees to its operations in Oklahoma City. And United Dynamics, an engineering firm specializing in aerospace and defense engineering, announced in July 2021 a new engineering center in downtown Oklahoma City.
In April, Governor Kevin Stitt announced the launch of the Oklahoma Innovation Expansion Program. It makes $10 million in funding available to qualifying manufacturers to support new product development and increase capacity at existing companies. In addition to encouraging new capital investment, it will support existing jobs and the creation of new jobs. “To become a Top Ten state, we need to support the continued growth and success of our existing businesses,” Stitt said in a press release. “The Oklahoma Innovation Expansion Program will lead to more jobs, a more diverse economy and continue to show the nation that Oklahoma is open for business.”
The Peace Garden State is experiencing one of the biggest economic booms in 25 years, says James Leiman, commissioner of the North Dakota Department of Commerce. While North Dakota is the second-largest hydrocarbon producer in the country, its clean energy initiatives also offer new economic opportunities. Gov. Doug Burgum announced in May 2021 an ambitious goal to help make the state carbon neutral by 2030. Through carbon capture, storage and utilization initiatives like Project Tundra, North Dakota can now turn sustainable initiatives into a thriving industry. The state has a storage capacity for more than 250 billion tons of carbon dioxide, nearly 50 times the country’s annual energy-related carbon dioxide output. “Of the states, North Dakota is among the best positioned to help our country and our world transition in an economically feasible way to a carbon-constrained future while providing reliable, resilient, and affordable energy,” he said.
Other sectors are also booming in the state. Aldevron, founded in Fargo in 1998, was recently acquired by Danaher for nearly $10 billion. Bakken Energy and Mitsubishi Power Americas also announced a strategic partnership agreement to establish a world-class hydrogen hub in North Dakota.
The Greater Minneapolis St. Paul Regional Economic Development Partnership has been hard at work. According to its 2020 snapshot, the region added more than 1,300 jobs in the past year that pay an average of more than $50,000. MSP also connected 5,000 entrepreneurs, engaged 50 international health tech companies and made 6,000 tech connections around the country.
According to the Minnesota Department of Employment and Economic Development, state exports of agricultural, mining and manufactured products jumped 29 percent over the past year to $6 billion in Q2 of 2021, surpassing pre-pandemic levels. Officials attribute this to opening more Minnesota Trade Offices in Africa, the Arabian Gulf and South America. Top-performing exports include machinery, electrical equipment, mineral fuels/oils, food by-products, meat and miscellaneous grains. “Exports are trending in the right direction, showing the resiliency of Minnesota businesses,” said DEED Commissioner Steve Grove in a press release. “We are especially encouraged by the state’s growth in exports over the same quarter in 2019, surpassing pre-pandemic levels.”
Recent data from the U.S. Bureau of Economic Analysis found Illinois’ economy grew at an annual rate of 6.4 during the first quarter of 2021. The most improved sectors were those hardest hit during the pandemic—arts, entertainment and recreation, along with accommodation and food services. Durable goods improved at a rate of 13 percent, while IT and media grew at a rate of 14 percent.
Illinois had several exciting announcements in the past year. InnovaFeed announced in March 2021 plans to build the world’s largest insect protein production facility in Decatur. Lion Electric announced in May 2021 plans to build the country’s largest electric vehicle manufacturing plant in Joliet. The $70 million project will create 745 jobs and produce more than 20,000 zero-emission vehicles per year.
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Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
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