Move aside the skepticism and apathy; hello hope and success.
Mike Randle, editor
I have traveled more in the last six months than I have in any six month period since the good old days. You remember the good old days, when economic development in the South was fun? That was most of the 1990s and a short period from 2004 to 2006. Those were the days. Those were the days when the South dominated this nation's economy (it still does, but let's act for now that it doesn't).
For example, in 1996 the American South topped the Northeast, Midwest and West in every Gross Regional Product category that the federal government tracks but one. GRP totals coming out of the South in 1996 topped the other three regions in manufacturing, construction, farms/forestry, transportation, wholesale trade, retail trade and government categories. The only industry sector the South didn't lead all other U.S. regions in was what the feds called back then the FIRE category (finance, insurance and real estate). That changed in 2000 when the South wrestled the top spot in the FIRE category away from the Northeast. Thus, for the first time in the South's history it led all U.S. regions in gross regional product in every industry sector tracked by the federal government.
The reason I have traveled more in the last six months than I have in years is because the good old days are not only coming back, they are here, and we don't even know it. I realize it is tough for some folks to even consider believing that statement. Failure creates skepticism and apathy, which is at a high level with economic development and political leaders in the South right now. I see it every day from half the states in the region and much of it is sourced from political nonsense. The other half is deaf of the clutter and is enjoying an economic renaissance not seen since the '90s because they know what we know. I mean, it has been right there, plain as day, for three years now. We saw it, but we didn’t get it. If it was a snake it would have bit us.
As mentioned, I have had a dizzying schedule of speeches since we stumbled upon in August what we believe is the most promising economic expansion the South has looked upon since World War II. I know, strong words, huh? Some of you may be thinking that SB&D has been wrong before. Yep we have, two times in 20 years and that was when we didn’t do our homework.
Well, we've done our homework on this one and the cool thing about this economic expansion that we are predicting is that we can't be wrong. You know why? Because this run started three years ago and we didn’t even know it.
So let's cut to the chase and start with a trusty graph (see facing page), as suggested to me by Louisiana Economic Development Secretary Stephen Moret in Baton Rouge in November.
SB&D has tracked every project announced in the South since 1991 of 200 or more jobs and/or $30 million or more in investment. The red bar shows the number of projects each year (results are from the previous calendar year) meeting or exceeding our thresholds. Note that in calendar year 2010 the South saw its best year in total projects since 1998 and 2010 was the second-best performance in 20 years. While we will not publish 2011 results until June, we can safely say that it was another banner year in the South.
We have also separated the projects into manufacturing (blue) and services (black). Note that in 1996 services beat manufacturing for the first time ever in total deals and it stayed that way until 2007 when manufacturing reemerged as the top sector in the South. How important was manufacturing topping services in 2007 for the first time in 11 years? It was huge, but not nearly as important as manufacturing widening the gap each year since. That four-year run indicates that a monumental shift is occurring in the South's economy. To borrow a headline from a Forbes story in December posted on The Randle Report, “Heavy Metal is Back,” y’all.
We obviously knew something was up in 2007. Later, we were stunned when in 2010 manufacturing projects in the South set a 20-year record of 335 deals of 200 or more jobs and/or $30 million or more in investment. Stunned? Yes, but we were more baffled than anything. Why was this happening?
Well, our cover story, titled “A defining moment: How the American South is beating China at its own game” answers that question. Now we understand and it took the excellent report published by the Boston Consulting Group titled "Made in America, Again," for us to put our data and their data together to explain the very beginning of what we believe is the largest economic expansion the South has seen in our lifetime.
So, read the cover story, study the chart on the adjoining page then read Boston Consulting Group's report. In other words, do your homework. By putting the information contained in the three together, we think you will be convinced that the South is already experiencing the good old days, again.