Regional Report: South Atlantic States' Economies Showing New - and Renewed - Strengths
Mali R. Schantz-Feld (July 2011)
Boeing 787 Dreamliner will be built in North Charleston, South Carolina.
New and renewed strengths are warming the economic development climate in the South Atlantic region. Dr. Jeff Humphreys, director of economic forecasting at the University of Georgia, Terry College of Business, has seen growth activity in temp agencies, healthcare, federal government, defense, transportation and logistics, and professional and technical services. He notes that a slight upturn in manufacturing shows promise, but sectors such as residential and non-residential construction, building materials, and financial services related to construction are still "experiencing headwinds."
International trade and foreign direct investment, mostly from Asia, are expected to grow in the next year to 18 months, says Humphreys, because of a weak dollar and lower property values. Although budgets are still tight, governments in the South Atlantic are "budgeting for small gains and freeing up funds for incentives." With deals increasingly focused on "the bottom line," companies are exploring the region's more economical sites. Since the recovery is not confined to any one industry, Humphreys anticipates that it will be spreading across the region's metropolitan areas.
An Auto and Aviation Hub
The automotive sector has felt a recent unexpected push in activity after the earthquake in Japan, says Humphreys. But, even before that, the region had already been established as a hub for automotive-related activity.
In Georgia, Kia Motors Manufacturing Georgia, Inc. (KMMG) has begun expanding each of the four main shops at its West Point plant - stamping, welding, painting, and general assembly - to raise annual capacity to 360,000 vehicles starting in 2012. The hiring process is also under way for nearly 1,000 new employees for the addition of a third shift, resulting in the creation of a total of 3,000 new jobs. And, Porsche Cars North America is building a new headquarters and creating approximately 100 jobs over the next three years in the "Aerotropolis Atlanta" development site in Hapeville, Ga.
In North Carolina, Pittsburgh Glass Works, LLC, a supplier of automotive glass products and aftermarket glass services, plans to open an $85 million manufacturing facility in Elkin in 2012, creating more than 260 jobs over four years. The firm considered 88 sites throughout the United States before deciding to locate in North Carolina, according to Governor Bev Perdue. The project was made possible in part by state grants from the Job Development Investment Grant and One North Carolina programs.
Virginia also touts an established automotive sector. With 170 automotive companies, the state is home to the largest Volvo truck plant in the world, Volvo Trucks North America's New River Valley Plant in Dublin, as well as the headquarters of Volkswagen of America in Herndon.
The aviation/aerospace sector is also making news in the South Atlantic region. Gulfstream Aerospace is expanding its operations in Savannah, adding more than 1,000 jobs and investing at least $500 million, representing the firm's second major expansion in the past five years. Joe Lombardo, president of the firm, cites several of Savannah's advantages including "a rich pool of talented employees, an established airfield and sufficient acreage for expansion, transportation facilities suitable for heavy equipment and machinery, and weather favorable to year-round flight-testing and flight-training operations." He also credited teamwork by the city's economic development department, the Savannah C. of C., the Savannah Economic Development Authority, and the Creative Coast Alliance, as well as local educational institutions, including Savannah Tech and the Savannah College of Art and Design. He adds, "What's more, the appeal of this coastal community also assists in recruiting talent to the area."
And the Boeing 787 Dreamliner Final Assembly building has just opened in North Charleston, S.C., despite the state's battle with the NLRB concerning the company's decision to build in South Carolina instead of Washington State. Jack Jones, vice president and general manager of Boeing South Carolina, noted at the facility's opening that "airline customers from around the world will come to the South Carolina Lowcountry to take delivery of their 787s, and we look forward to demonstrating what `made with pride in South Carolina' is all about."
The energy sector also continues activity in the South Atlantic region. In 2010, Mage Solar chose Dublin, Ga., for its North American headquarters and a manufacturing facility, creating 350 jobs and investing $30 million. Enfinity Corp. of Belgium, developer of solar photovoltaic (PV) solutions, put its Americas headquarters in Atlanta in March.
In Florida's Treasure Coast region, the Indian River C. of C. and Indian River Board of County Commissioners teamed with Enterprise Florida for the INEOS New Planet BioEnergy (INP BioEnergy) project, representing a joint venture between the company and New Planet Energy, LLC. Florida INP BioEnergy has established a test and licensing facility in Indian River that will create 55 jobs and produce bio-fuel from organic waste.
Helene Caseltine, economic development director for Indian River County C. of C. says, "Similar firms, as well as those in the support industries, are making inquiries about setting up business operations in the area. Locally, it will benefit our tourism industry as potential users visit the demonstration site to see the process firsthand, staying in our hotels and eating in our restaurants.This will also be the training site for future bio-energy centers, as the trainees come in from all over the country for an extended period."
Mitsubishi Nuclear Energy Systems, Inc. (MNES) will locate its main engineering center in Charlotte, N.C. The supplier of nuclear power plants and replacement components will use the new engineering center for projects to build nuclear power plants for U.S. utility companies. The company plans to create 135 jobs over the next five years with a $4.1 million capital investment. The project was made possible in part by a state grant from the Job Development Investment Grant program.
An Information Technology Niche
Defense and security companies are also finding a safe harbor in this region's economy. In Virginia, GE plans to open an Information Security Technology Center in Henrico County that is expected to create approximately 200 new high-tech jobs over the next few years focused on cyber security, as well as network design, architecture, data management, and application development. Charlene Begley, president and CEO of GE Home & Business Solutions and senior vice president and CIO for GE notes, "We're excited to expand GE's presence in Virginia. Virginia has a wealth of technical talent and strong educational facilities, which will be key in filling these IT security jobs."
And the Internet's global retailer, Amazon.com, recently made news in two South Atlantic States. It plans to build a new 70,000-square-foot customer service center at Kinetic Park in Huntington, W.V., to replace its current location in downtown Huntington, and to create 200 new full-time jobs by the end of 2014.
And, Amazon.com plans to invest up to $125 million and create 2,000 new permanent jobs with the establishment of a new distribution center in Lexington County, S.C. The facility is expected to create an additional 2,500 seasonal positions to meet its needs and to be operational before the 2011 holiday season.