Regional Report: Mid-Atlantic States Grow Finance, Food Processing, High Tech Industries
New York, New Jersey, Pennsylvania, Delaware, and Maryland are attracting investments in sectors ranging from finance to food processing.
Mali R. Schantz-Feld (November 2010)
Post-recession, the Mid-Atlantic region retains its reputation as one of the strongest areas of the country. Several sectors are growing, according to Anirban Basu, chairman and CEO of Baltimore's economic policy consultancy Sage Policy Group. As each state builds on historic strengths and develops new niches, positive signs are evident in financial services, defense and homeland security, distribution, and general consumer spending.
Industry diversity is the region's hallmark. Industrial production is rebounding in Pennsylvania, Basu says, and will continue to grow for the next few decades with expansions in the Marcellus Shale and natural gas products. In Maryland, future developments will abound in defense and homeland security due to the proliferation of military bases. Several years ago, in response to Base Realignment and Closure (BRAC), Maryland was charged with accommodating many people reassigned from U.S. military installations. BRAC affected Maryland bases including the Aberdeen Proving Ground, Andrews Air Force Base, Fort Detrick, and Fort Meade. In New York and New Jersey, economic healing is underway in finance, distribution, advertising, and back office operations. Meanwhile, the Delaware Economic Development Office anticipates automobile, chemistry, financial services and insurance, life science and biotech, tourism, agriculture, and corporate legal services companies to spur expansion.
New York has benefited from federal policies supporting banking and financial services, writes Steve Cochrane in "U.S. Regional Outlook: Smaller Areas Lead Recovery," for Moody's Analytics. "The Mid-Atlantic states also showed an encouraging rise in jobs in March 2010," Cochrane writes. Calling this a pattern instead of a trend, the rise indicates improved hiring conditions in areas with a higher concentration of service-producing industries, signaling a broader recovery. Newark, New Jersey, a large Mid-Atlantic metro, seems to have already emerged from the recession, according to Cochrane.
New York industry is expanding across an impressive array of sectors. The list includes the biotech, cleantech, distribution, food processing, industrial machinery and systems, and information hardware and software. Incentive plans are enticing prospective clients from variety of demographics. In July, Governor David Paterson announced a $50 million Small Business Revolving Loan Fund to provide capital to minority and women-owned enterprises, and other entrepreneurs that have difficulty accessing regular credit markets. The Excelsior Jobs Program was also launched this summer to provide job creation and investment incentives to targeted industries such as biotechnology, pharmaceuticals, high-tech, cleantech and green tech, financial services, agriculture, and manufacturing. Companies can pursue four new tax credits in these industries to create and maintain jobs or invest.
Some companies are combining high-tech interests with green initiatives in New York. This year, Internet company Yahoo! completed the first phase of an environmentally-friendly investment in Lockport. The $150 million data center will create 125 well-paying, high-tech jobs. Yahoo! received incentives including 15 megawatts of low-cost hydropower from the New York Power Authority for this phase.
While attracting out-of-state companies like Yahoo!, native New York firms invest in the area. Emerson Network Power, a manufacturer of power quality and surge protection equipment, has been located in Binghamton for almost 40 years. It built a new 40,000-square-foot headquarters facility a few years ago. "Of course there are any number of reasons to place a business in New York, but for us the real differentiator was the depth and breadth of the area's educational infrastructure," said William C. Fierle, company president. "New York's colleges and universities consistently produce an intelligent, creative, and well-prepared work force, and those are the types of people who excel at Emerson Network Power. Simply put, we like New York because it's a great place to recruit new talent and to provide continuous educational opportunities for our existing employees."