Regional Report: Growth in Biomedicine, Energy, and Food Processing Helping Mid-Atlantic Prosperity
In general, the Mid-Atlantic’s strongest sectors are financial and business services, healthcare, biomedicine, food processing, and energy. It’s been an uneven year for the Mid-Atlantic, but there are plenty of bright spots to light the way.
In general, the Mid-Atlantic’s strongest sectors are financial and business services, healthcare, biomedicine, food processing, and energy. In New Jersey, finance and insurance contributed almost $35 billion (about 8 percent) to the state’s real gross domestic product last year. In July 2014, the CLS Group, a global provider of transaction settlement services for the foreign exchange market, opened a new 16,000-square-foot facility in Woodbridge, New Jersey.
A few cities have also won some $1 billion+ information-technology projects that will have big impacts on their economies, such as IBM’s new Watson Group in New York City’s “Silicon Alley,” which will developed cloud-based services, and Comcast’s innovation and technology center in Philadelphia, which is expected to create 4,000 jobs and generate $2.75 billion in total economic impact within the state.
With some of the best biomedical research facilities in the nation and one of the greatest clusters of biotechnology, pharmaceutical, and medical-device makers, the Mid-Atlantic has a long-standing reputation for healthcare innovation and commercialization. For example, Maryland is home to the National Institutes of Health, Food and Drug Administration, Johns Hopkins University, and over 350 biotechnology firms.
Although there has been considerable positive activity in this sector, there has been some downsizing and restructuring. Even with these adjustments, the number of biomedical companies in New Jersey increased between 2008 and 2013 by 9.4 percent to about 3,000, employing more than 115,000 people.
One of the most recent investments in New Jersey is Bayer HealthCare’s new U.S. headquarters on a 94-acre campus in Whippany, which consolidates four other operations in New Jersey and New York. “Although the aim is to bring our employees together in one location, this initiative is about growing together, as well as building the brand and reputation of our company,” says Marijn Dekkers, chairman for Bayer AG Group Board of Management. “Whippany is our footprint on the East Coast now, as we invest further in the U.S.”
Pennsylvania also has a strong life sciences industry — more than 2,300 pharmaceutical, biotechnology, and medical device companies in the state generate about $40 billion in revenues. Research and development has generated 6,512 patents over the last five years, which often provide the technologies for new start-up companies. For example, Nuron Biotech, a rapidly expanding specialty biologics and vaccines company in Exton, Pennsylvania, is in advanced trials for a promising new drug for treating multiple sclerosis.
In New York, another fast-growing company, Regeneron Pharmaceuticals, is expanding its operations in Westchester County, creating 400 jobs. Further up the Hudson River, BioHarvest, an Israeli biotechnology company, is moving its research and development operations to Albany from Tel Aviv. The company will collaborate with the University at Albany’s Cancer Research Center to produce innovative technologies for human health. “The collaboration with BioHarvest is a model public-private partnership that will clearly illustrate how the discovery, innovation, and entrepreneurship equation creates jobs and positive economic outcomes for the community” says University at Albany President Robert J. Jones.
At the Center of the Energy Boom
With its abundance of oil and gas reserves in the Marcellus and Utica shale formations, Pennsylvania is the center of the energy boom in the Mid-Atlantic. Total production is projected to exceed 17.5 billion cubic feet per day in the fourth quarter of 2014. This is driving a projected increase in state GDP of 4.5 percent for 2014.
The abundance of oil and gas is also creating jobs in those industries that support the energy industry. Chemical manufacturing is also on the rise, thanks to cheap shale gas that is used for fuel as well as feedstock. Panda Power has broken ground on an 829-megawatt natural-gas fueled power plant in Lycoming County, located in the center of Marcellus shale country. It will be one of the cleanest natural gas-fueled power plants in the nation when it starts operations in 2016.
Several large-scale, clean-energy investments have also been announced in New York and Maryland. SolarCity plans to invest $5 billion to build a one-million-square-foot, solar-panel manufacturing facility in South Buffalo, New York, resulting in 5,000 new jobs for the state. When it reaches full production, the factory will be the largest of its kind in the Western Hemisphere, producing more than 1 gigawatt of annual solar capacity.
In Maryland, the state government is eager to develop offshore wind farms near Ocean City. The proposed wind farms will cover almost 80,000 acres, with the potential of generating up to 1,450 megawatts of power. Sixteen companies have qualified for the project. If proven viable, the project could also lead to the development of a wind turbine manufacturing plant in the area.
Food Processing Expanding
Food processing has shown strength in several Mid-Atlantic States, especially New York and Pennsylvania. Not only are these companies setting up new food-processing operations or expanding, they are building distribution centers as well — another sign of economic recovery.
Food processors tend to locate in fertile landscapes close to local farmers and ranchers. For example, agriculture is a key economic driver in Maryland’s productive Howard County, which has 335 farms. One of those companies — Coastal Sunbelt Produce — distributes produce and dairy products. It recently broke ground on a new 240,000-square-foot facility and plans to hire 400 additional workers. In Pennsylvania, Bell and Evans, a poultry processing and packaging company, has started construction on a $48 million, 158,000-square-foot facility in Lebanon County, which will create 380 new jobs.
This fall, Goya Foods, the largest Hispanic-owned food company in the U.S., will open its regional distribution center and U.S. headquarters in New Jersey. Located in Jersey City, the 900,000-square-foot facility will be the largest expansion in the company’s history and feature both office and warehouse space.
In another big announcement, Amy’s Kitchen will invest $100 million to construct a 500,000-square-foot organic food manufacturing plant in Orange County, New York, creating nearly 700 new jobs in the Hudson Valley. The plant will be operational by the end of 2016.
“The beautiful site we’ve chosen is on the Walkill River,” says Andy Berliner, owner of Amy’s Kitchen. “Orange County is the perfect spot to supply our largest customers. The potential to source so many of our agricultural ingredients close to the plant was another important factor in our decision. We also believe it’s a great area to attract excellent employees. The help and support we’ve received from the state, county, and city has been outstanding, as well as the warm response we’ve received from the local community,” says Berliner.
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