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Regional Report: South Atlantic Region Ranks High for Business Investment

With its well-established infrastructure, leading workforce-development programs, and right-to-work states, the South Atlantic region continues to attract advanced technology companies.

Directory 2017
The Volvo Cars plant under construction in Berkeley County, S.C., underscores the fact that the South Atlantic region continues to expand its powerhouse manufacturing platform, in addition to its strengths in technology, services, and agriculture. Owned by China’s Zhejiang Geely Holdings since 2010, Volvo is expanding its manufacturing base to include a $500 million U.S. plant where it plans to build about 100,000 vehicles a year, providing about 4,000 jobs. And importantly for South Carolina and the rest of the region, the Volvo brand and products are on the rise again in the American market after the company’s sale by Ford to Geely and the Great Recession of 2008 to 2010 disrupted what had been a fairly significant niche in the United States.

“We have been in the U.S. for 60 years; we wanted to show a commitment that we’re going to stay here for another 60 years,” Lex Kerssemakers, senior vice president of Volvo Americas, told Area Development recently. “And that’s normally the commitment that you make with a factory, about 60 years.”
SlideshowSouth Atlantic Region Demographics and Industries South Atlantic Region Demographics and Industries
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South-Atlantic Region Demographics and Industries

  • Florida: Principal Manufacturing Industries

    Florida: Principal Manufacturing Industries Source: Emsi 2016.4 (via BLS, Census and BEA)
  • Georgia: Principal Manufacturing Industries

    Georgia: Principal Manufacturing Industries Source: Emsi 2016.4 (via BLS, Census and BEA)
  • North Carolina: Principal Manufacturing Industries

    North Carolina: Principal Manufacturing Industries Source: Emsi 2016.4 (via BLS, Census and BEA)
  • South Carolina: Principal Manufacturing Industries

    South Carolina: Principal Manufacturing Industries Source: Emsi 2016.4 (via BLS, Census and BEA)
  • Virginia: Principal Manufacturing Industries

    Virginia: Principal Manufacturing Industries Source: Emsi 2016.4 (via BLS, Census and BEA)
  • West Virginia: Principal Manufacturing Industries

    West Virginia: Principal Manufacturing Industries Source: Emsi 2016.4 (via BLS, Census and BEA)
  • South Atlantic Region: 2016 Educational Attainment

    South Atlantic Region: 2016 Educational Attainment Source: Emsi and U.S. Census Bureau's decennial census/Current Population Statisics
  • South Atlantic Region: Demographics

    South Atlantic Region: Demographics Population - Source: Emsi and Census, Total Labor Force - Source: BLS (Local Area Unemployment Statistics), Jobs - Source: Emsi 2016.4, Total Unemployed - Source: BLS (Local Area Unemployment Statistics)
  • South Atlantic Region: Top Industry Clusters

    South Atlantic Top Indistry Clusters Source: Emsi Developer (via BLS, Census, BEA and Emsi's Input-Output Model)
Demographic Analysis Provided by Emsi. Emsi is a labor market and economic analytics firm based in Moscow, Idaho. It supplies data via software and consulting to hundreds of economic development organizations, workforce agencies, educational institutions, and companies in the US, UK, and Canada. For more, visit economicmodeling.com.
Ranking Well
The South Atlantic States rank well as a region for business investment against any other region of the country. Georgia, for instance, ranked as the No. 1 state for the third year in a row in Area Development’s 2016 Top States for Doing Business survey. South Carolina was No. 2, Florida was No. 7 and North Carolina was No. 9.

“Companies look at wages, capital investment, utilities, transportation and tax costs, and based on the projects we’re seeing, we find the South Atlantic to be competitive in most of those areas,” says Dean Uminski, partner in Crowe Horwath, a Chicago-based accounting, consulting, and technology firm.

Scott Kupperman, founder of Kupperman Location Solutions in Lake Forest, Ill., adds, “The entire region is very viable; it’s a great place to work and look for project opportunities. Companies see other companies in their industry, or peers in terms of economic history, doing well in this part of the country and they believe that it signals good things for them.”

Kupperman cites the continued demographic evolution of the area over the last couple of decades as a growing strength. “Most places in the region have population growth, and cities that have evolved in many ways from historically being kind of more rural and sleepy and economically depressed,” he says. “Companies recognize that the population in that whole region is growing and that people will continue to move there whether to relocate or take new jobs or retire. In general, companies have an easy time seeing that they ought to be there, to be making something, to be providing a service. And the barriers to entry for doing that are fairly small.”

Land remains fairly abundant in the region, and yet commercial infrastructure is developed enough throughout that “it usually isn’t too difficult to find a site that has some infrastructure in place,” according to Kupperman. States in the region also provide a labor environment that remains largely nonunion, with the six South Atlantic States being right-to-work. This remains crucial for many companies eyeing the South Atlantic — so is a regulatory environment that Kupperman calls “not too restrictive.”

Governments in the region are doing a better job of working with companies. Georgia and North Carolina are among national leaders in workforce-development programs. North Carolina is streamlining its tax structure and improving infrastructure; Florida is tinkering with improvements to its Enterprise Florida financial-incentive program; and Virginia has improved its incentive programs in the last few years, according to Larry Gigerich of Ginovus, a site selection consulting firm based in Indianapolis.

Of course, there have been some challenges. North Carolina badly stubbed its toe in economic development terms after a new law known as HB2 required transgender people to use public restrooms that correspond with the sex on their birth certificate, not with their gender self-identification. It also limited other anti-discrimination protections for LGBT people. The state lost commitments totaling thousands of future jobs from company after company that responded to the new law by pulling their expansion or siting plans from North Carolina, including CoStar Group, PayPal, and Deutsche Bank.

The region also remains vulnerable to the loss of lower-skilled manufacturing jobs and small-profit-margin products as it has already in textiles, tobacco, and consumer products, Gigerich says. “The area also is going to be required to identify ways to develop vacant industrial properties, increase the skill level of the workforce, and continue to build economic development capacity in rural areas,” he believes.

South Atlantic States Recent Industry Announcements

Companies that have announced new and/or expanded facilities in the South Atlantic region.
  1. Volvo Cars

    Berkeley County, SC

    A Volvo Cars plant is under construction in Berkeley County, S.C.

  2. Applied Predictive Technologies

    Arlington, VA

    Applied Predictive Technologies recently announced it would locate its headquarters operation in Virginia’s Arlington County, in the northern part of the state, crewing 368 new jobs.

  3. Microsoft Corp.

    Mecklenburg County, VA

    Microsoft Corp. plans to invest $252 million to expand its data center site in Mecklenburg County, adding 44 jobs in the process.

  4. CTD Holdings

    Jupiter, FL

    CTD Holdings, a pharmaceutical biotech company, recently said it would establish its corporate headquarters in Jupiter, Fla., creating 51 jobs.

  5. Johnson & Johnson

    Tampa, FL

    In Tampa, Johnson & Johnson recently opened a $23 million North American shared-services headquarters, contemplating the addition of as many as 250 more professionals over the next three years.

  6. Anthem

    Atlanta, GA

    Midtown Atlanta soon will add about 1,800 jobs as Anthem establishes an IT services hub there, with an investment of more than $20 million over the next six years.

  7. Frontier Secure

    Wise County, VA

    Frontier Secure will locate a customer-care center in Wise County, Va., employing up to 500 people.

  8. Dollar Tree

    Chesapeake, VA

    Dollar Tree recently announced it would develop its new $110 million corporate headquarters in Chesapeake, Va., retaining 825 existing jobs and creating 600 jobs over the next six years.

  9. Ortec

    Anderson County, SC

    Ortec, a leading biomaterial and polymer technology company, has decided to invest $20 million and create 60 jobs in Anderson County in an expansion of its existing operations there.

  10. Advanced Ceramic Coatings

    Spartanburg County, SC

    Advanced Ceramic Coatings — a 50-50 joint venture between GE Aviation and Turbocoating SPA of Parma, Italy — has created 50 new jobs in Spartanburg County with a $15 million investment in a 62,500-square-foot expansion.

  11. Honda

    Florence County, SC

    Honda announced an expansion of the Florence County manufacturing facility where it makes all-terrain and side-by-side vehicles, planning to invest $45 million to add two new product lines and 250 jobs over the next few years.

  12. Bombardier

    Harrison County, WV

    Bombardier said it plans to expand its aircraft service center in Harrison County, W. Va., creating as many as 300 new jobs.

  13. VT Mobile Aerospace Engineering

    Pensacola, FL

    VT Mobile Aerospace Engineering plans to build a 173,000-square-foot facility that will create 400 maintenance and engineering jobs at the local airport.

  14. International Consortium for Advanced Manufacturing Research Center

    Kissimmee, FL

    Florida has created the International Consortium for Advanced Manufacturing Research Center, which is building bridges between academic researchers and industrial partners developing technology and a highly skilled workforce.

  15. UPS

    Atlanta, GA

    As its business has grown along with demand for e-commerce deliveries, UPS has decided to invest more than $400 million to establish a regional sorting and distribution hub in Atlanta — also UPS’s headquarters city — by the end of 2017.

Advanced Technology Hotbed
Nonetheless, when it comes to information technology and other advanced pursuits, the region demonstrates “a good foundational performance,” says Scott Redabaugh, a managing director in the JLL Business Consulting group. Northern Virginia’s appeal to defense and cybersecurity companies continues to grow because of its inclusion in the D.C. region, he says.

Applied Predictive Technologies recently announced it would locate its headquarters operation in Virginia’s Arlington County, in the northern part of the state. At stake are 368 new jobs that will be created at the cloud-based-analytics software company. The rest of the state also is a player in technology-related jobs. For example, Microsoft Corp. plans to invest $252 million to expand its data center site in Mecklenburg County, which hugs Virginia’s southern border. It will use the increased capacity to serve its growing customer base, adding 44 jobs in the process. Since its original $499 million investment in Mecklenburg County in 2010, Microsoft has continued to invest at the site to the total tune of nearly $2 billion and more than 250 jobs. Biotech and life sciences remain on a growth arc in the South Atlantic region as well. Florida, for example, is home to the nation’s No. 2 medical-device manufacturing industry, the third-largest pharmaceutical-manufacturing industry, and the No. 7 biotech R&D industry, in total employing more than 27,000 professionals.

CTD Holdings, a pharmaceutical biotech company, recently said it would establish its corporate headquarters in Jupiter, Fla., creating 51 jobs. The announcement is partly the result of an outreach of the Business Development Board of Palm Beach to create a Life Science Advisory Council that will proactively attract more businesses like CTD Holdings.

In Tampa, Johnson & Johnson recently opened a $23 million North American shared-services headquarters, contemplating the addition of as many as 250 more professionals over the next three years, adding to the more than 250 employees who already work in the 88,5000-square-foot facility. A company executive praised Tampa as “a great source of managerial-level talent” because of the presence of other shared-services providers in the metro area.

Companies are finding sites across the South Atlantic region where the talent they need is increasingly available. Midtown Atlanta, for example, soon will add about 1,800 jobs as Anthem establishes an IT services hub there, with an investment of more than $20 million over the next six years. Anthem cited Atlanta’s evolution into a hotbed of health-IT activities.

Meanwhile, Frontier Secure, a division of Frontier Communications, will locate a customer-care center in Wise County, Va., where up to 500 people will provide customer and technical support. And Dollar Tree recently announced it would develop its new $110 million corporate headquarters in Chesapeake, Va., replacing the existing one in Hampton Roads, Va., retaining 825 existing jobs and creating 600 jobs over the next six years.

Engineering and Manufacturing Strengths
Engineering and manufacturing continue to be vital pursuits for the region, with long-established magnets such as major Boeing and BMW plants in South Carolina. Also in South Carolina, Ortec, a leading biomaterial and polymer technology company, has decided to invest $20 million and create 60 jobs in Anderson County in an expansion of its existing operations there. Advanced Ceramic Coatings — a 50-50 joint venture between GE Aviation and Turbocoating SPA of Parma, Italy — has created 50 new jobs in Spartanburg County with a $15 million investment in a 62,500-square-foot expansion. And Honda announced an expansion of the Florence County manufacturing facility where it makes all-terrain and side-by-side vehicles, planning to invest $45 million to add two new product lines that will be put together in a 115,000-square-foot addition. It’s expected to add 250 jobs over the next few years.

The region has a pronounced specialty in aerospace manufacturing and engineering as well. For example, Bombardier said it plans to expand its aircraft service center in Harrison County, W. Va., creating as many as 300 new jobs in a state that otherwise has been struggling because of the decline of the coal industry.

Meanwhile, in Pensacola, Fla., VT Mobile Aerospace Engineering plans to build a 173,000-square-foot facility that will create 400 maintenance and engineering jobs at the local airport. More broadly, Florida recently was recognized by PwC as the No. 2 state in the country for aerospace manufacturing attractiveness, partially given the history of the “Space Coast” on the Atlantic Ocean that is home to Cape Canaveral.

In fact, Florida is among those states that continue intense development of advanced and high-tech manufacturing in general. With that in mind, the state has created the International Consortium for Advanced Manufacturing Research Center, which serves as a magnet to attract and grow next-generation advanced manufacturing, building bridges between academic researchers and industrial partners developing technology and a highly skilled workforce.

Distribution is another robust arena for growth in this region, especially as the population to the south and west continues to grow in the continuing migration to the nation’s Sun Belt.

UPS has been a longtime corporate stalwart in Atlanta. And as its business has grown along with demand for e-commerce deliveries, the company has decided to invest more than $400 million to establish a regional sorting and distribution hub in Atlanta — also UPS’s headquarters city — by the end of 2017. “When combined with the strong transportation connections and talented labor pool that Atlanta provides, UPS is building flexibility to meet the growing needs of our customers and our business in Georgia, and around the world,” says David Abney, UPS chairman and CEO.
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