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Green Shoots Bode Well For Southeastern States

In Florida, new deals include Aerion’s $300 million investment in a Melbourne-based headquarters.

There isn’t a single state in the country that hasn’t experienced a major economic blow in the past few months due to the Covid-19 pandemic. Yet, EDCs in the Southeast say behind the “doom and gloom” headlines, many industries are holding up. Surprisingly, states are even reporting new investments in recent months as manufacturers, life sciences and tech companies seek to capitalize on growing healthcare needs and the “stay-at-home” economy.

#2* FLORIDA: Powered by Economic Diversification

Recent diversification efforts have helped keep Florida’s economy in a far better place than it would have been in the past, says Jamal Sowell, CEO of Enterprise Florida. Able to shift to telecommuting models, the financial and business services industry held up well. Manufacturing has also stayed busy with companies like Lockheed Martin, Northrop Grumman and Embraer resuming operations on the Space Coast.

Florida even continued to ink some new deals. In May, high-speed jet manufacturer Aerion announced 675 new jobs and a $300 million investment in a new headquarters in Melbourne. Healthcare companies MPLT and Forcura both announced corporate headquarter relocations to the state. “We have a number of other announcements that we look forward to sharing in the coming weeks,” Sowell says.

EFI took steps to help businesses, including suspending the initial fee for its Microfinance Loan Guarantee Program early in the pandemic. In May, the organization rolled out a virtual trade grant programs to help Florida companies conduct business overseas without physical travel. In early June, the agency launched the Virtual Trade Shows Grant Program to allow companies generate new export opportunities.

#4 TENNESSEE: Big Reopening Plans

To better organize the volunteer state’s economic recovery effort, Gov. Bill Lee created in April 2020 the Economic Recovery Group (ERG), a public-private partnership that fosters collaboration, connection and communication across industries. The ERG drafted guidelines that cover responsible reopening in virtually every industry. It also features a PPE vendor directory, printable guidelines and additional resources. “It has been a model and is a handbook that covers the gamut and how to open over various stages,” Bob Rolfe, commissioner of the Tennessee Department of Economic and Community Development.

One Tennessee industry that has held up is the 3PL logistics market. Home to the FedEx hub in Memphis, Tennessee is a one-day truck drive from 60 percent of the country’s population. Manufacturers like Black and Decker, Delta Faucets and LG maintained operations and employment numbers due to increased demand from “stay-at-home” orders.

Tennessee has an impressive 20 projects in the pipeline with more announcements coming, says Rolfe, who notes that there is no playbook for the current environment. “We have never been here, each day brings new challenges.”

#6 NORTH CAROLINA: Growing Opportunities in Life Sciences

Industries like IT, financial services and life sciences are not only holding up but growing, says Chris Chung, CEO of the Economic Development Partnership of North Carolina. In June, Global healthcare company Grifols Therapeutics announced a $351 million expansion and 300 new jobs at its Johnston County campus. GRAIL also announced a $100 million investment and nearly 400 new jobs at a new lab in Durham to develop a blood test that detects more than 50 cancers. “I don’t think anyone is seeing a 100 percent rosy picture, but it’s not all doom and gloom,” Chung says. “There will be a big focus on preventing the next pandemic, identifying a vaccine and cures. This all makes North Carolina well-positioned in the sector,”

Like many EDCs, the EDPNC has had to redirect its efforts. The state suspended tourism advertising to focus on surveying consumers on when they are ready to travel. A new area the agency is targeting is remote work. “If we can get the people living here and spending income from their job across the country, we are still getting the vast economic impact of that,” Chung says.

#8 SOUTH CAROLINA: Promise in the Palmetto State

South Carolina is trying to move ahead by focusing on its strengths, says Alex Clark, director of marketing and communications for the South Carolina Department of Commerce. “We’d like to think we’re in a good starting position because of the sustained economic development success we’ve had over the past 10 years,” Clark says.

Several sectors, including life sciences, medical devices and PPE, have seen strong demand in recent months, Clark says. Many life science companies are shifting focus to new products and services needed in the fight against Covid-19. In addition, the logistics sector benefited from the rise in e-commerce. Ross Stores announced in June the creation of 700 new jobs at an $68 million distribution center in York County. Kontane Logistics and Lowcountry Kettle also recently announced expansions in the state.

Activity is starting to pick up, Clark says. Many projects are larger in terms of investment and jobs, and the FDI ratio is as strong as it was in 2019. “It makes us feel optimistic,” she says.

#11 GEORGIA: Silver linings

While Georgia’s tourism industry has been “devastated,” manufacturing, financial services, life sciences and other sectors have been growing, says Pat Wilson, commissioner of the Georgia Department of Economic Development. Since issuing a stay-at-home order in mid-March, the state announced 13 projects, adding more than 7,700 jobs and $2 billion in investment. “That really helps us head to where we’re going to go after we come out of this crisis,” Wilson says.

As more of the economy moves online, the state’s thriving cybersecurity industry is also poised to benefit, Wilson says. In June, U.S. government services provider Perspecta announced 178 new jobs at a regional office at the Georgia Cyber Center in Augusta.

The governor created an Economic Recovery Task Force, and legislators have been working on legislation to assist companies seeking to reshore or bring PPE production to the state. “There are a few pieces of the puzzle that we are strongly positioned in as companies look to grow and expand their capacity,” Wilson says.

#16 VIRGINIA: Federal Stability

Virginia’s level of federal government employment and professional services helped it weather the economic storm, says Stephen Moret, CEO of the Virginia Economic Development Partnership. The VEDP team is focusing on 20 sectors expected to experience sustained growth in a post-Covid world, including tech, PPE manufacturing, online retail, warehousing and cloud computing.

VEDP adopted “virtual site tours” to cater to the new norms of attracting businesses. Most existing projects in the pipeline are also moving forward, Moret says. Microsoft announced in May it will invest $64 million to establish a new R&D regional hub in Fairfax County that will create 1,500 new jobs. ASGN is also investing $12.4 million to relocate its headquarters from Calabasas, California, to Henrico County. “The pandemic has disproportionately impacted non-traded sectors—traditionally a sector on which state-level economic developers are not focused. VEDP’s target industries have certainly been hit, but they are faring much better than hospitality or retail, for example,” Moret says.

#23 LOUISIANA: Betting on Recovery in the Bayou State

After the Bayou State was hit hard early in the pandemic, Gov. Edwards created the Resilient Louisiana Commission that includes 15 task forces covering every sector of the economy and working to develop safe reopening strategies. Louisiana Economic Development’s Business Expansion and Retention Group also transitioned to a virtual model to stay in touch with companies through Zoom and to offer guidance on things like disaster loans and the PPP. “We have seen an uptick in new business startups,” says Louisiana Secretary of Economic Development Don Pierson.

One area where the state sees opportunities is the entertainment industry. The new Quality Entertainment Company Program creates sustainable well-paid jobs focusing on film, digital media and other entertainment jobs As the industry prepares to resume activities, Pierson notes that travel restrictions and other Covid-related issues appear to be placing a greater emphasis on domestic production. “Louisiana finds itself particularly well-positioned to respond to these opportunities and help entertainment production companies hit the ground running with a deep, talented crew base, state-of-the-art facilities located throughout the state and film-friendly communities,” Pierson says.

#25 ALABAMA: Manufacturing a Post-Covid Future

Alabama’s restaurants and the tourism industry experienced a major Covid-19-related hit, but most of the state’s manufacturers quickly adopted new safety measures to resume production. “For the most part, demand for their products is still there, despite the global downturn,” says Secretary of Commerce Greg Canfield.

Mazda and Toyota are hiring more than 4,000 workers and are still on track to open their joint venture assembly plant in Huntsville in 2021. As the pandemic has exposed weaknesses in global supply chains, many manufacturers will likely shorten those networks by looking to OEMs in the state, Canfield says. “Alabama is well-positioned to take advantage of this trend, thanks to an extensive infrastructure network and available sites.”

The state also created the Alabama Workforce Stabilization Program, a collaborative effort between the state and educational institutions, to connect companies and displaced workers.

#27 KENTUCKY: Benefiting From E-Commerce

Emerging from the pandemic, Kentucky’s outsized manufacturing presence positions it for recruiting onshoring projects and further direct foreign investment, says Jack Mazurak, communications director for the Kentucky Cabinet for Economic Development. In addition, big players like Amazon, UPS, DHL and FedEx are experiencing shipping volumes normally only seen during the holidays. “As e-commerce continues trending upwards, ample opportunity exists for Kentucky and its more than 540 logistics and distribution facilities that employ about 75,000 people statewide,” Mazurak says.

Manufacturing continues to gain ground. In May and June, the state announced 19 new expansions and location projects, totaling more than $406 million in new investment and 1,549 new jobs. Mazurak notes the continued commitment to investment and creating jobs and growth in e-commerce are “encouraging signs that provide hope for the future during this time of great economic strife.”

#36 MISSISSIPPI: Looking Up in the Magnolia State Shipbuilding is a bright spot for the Magnolia State, where Ingalls recently won a U.S. Navy contract.

Many of Mississippi’s manufacturing operations have resumed their pre-pandemic numbers, says John Rounsaville, Mississippi Development Authority Interim Executive Director. While some transitioned to producing PPE to fill market needs, bedrock companies in the aerospace and defense manufacturing sector are experiencing combined growth. In June, Spaceflight company Relatively announced another expansion at the NASA Stennis Space Center, and Associated Wholesale Grocers announced a $300 million facility to be constructed in DeSoto County. The shipbuilding industry is also faring well, and, in May, Ingalls Shipbuilding in Pascagoula was awarded a $188 million contract from the U.S. Navy to provide procurement activities for an amphibious assault ship.

“While some projects were temporarily put on hold, the fact that companies are still announcing projects proves that our economy is growing and is not all ‘doom and gloom,’” Rounsaville says.

#37 WEST VIRGINIA: Making Do in the Mountain State

Like many states, West Virginia started shutting down in mid-March. Coal production, a big driver in the state, dropped approximately 30 percent.

Many of the state’s homegrown manufacturers converted their operations into filling pandemic-related needs. Appalachian Distillery in Ripley started making sanitizer, and thread manufacturer Kreinik Manufacturing started making elastic for protective masks. In June, Amsted Industries announced it became the majority owner of Advanced Graphite Materials in Clarksburg, and that it would retain 140 jobs.

Aiming to help its self-employed population, the state opened applications in mid-July for the West Virginia CARES Act Small Business Grant Program. It offers a grant of up to $5,000 for any business in the state with one to 35 employees. “We’re going to continue to work to try to figure out a way that we can also help our self-employed West Virginians who have no additional employees,” Gov. Jim Justice said in a press release.

*No. ranking in the 2020 Chief Executive Best & Worst States for Business.

The post Green Shoots Bode Well For Southeastern States appeared first on ChiefExecutive.net.

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