State Economic Development Bulletin – January 2022

 

State Economic Development Bulletin

In This Issue:

Economic Performance 

Nearly Every State Sees Employment Gains Over Past Year (Bureau of Labor Statistics)

Businesses Continue To See Challenges (U.S. Bureau of the Census)


SEDE Member Profile

Don Pierson, Secretary of Louisiana Economic Development


Economic Outlook

Supply Chain Disruptions and Labor Shortages Temper Growth (Federal Reserve Bank)

Latino Population Is an Untapped Engine for Growth (McKinsey & Company)


SEDE Webinars

SBA is Helping the Nation Recover (SEDE Network)

International Trade as a Component of a State’s Economic Strategy (SEDE Network/EDA )

Industry Trends

Industry Trends to Watch as Manufacturers Eye Growth (Deloitte)

AI in Manufacturing Can Be a Game Changer (NIST)


Workforce

Workers Not Skilled up for Digital Revolution (Information Technology and Innovation Foundation)

Desperate for State Workers, Governors Offer Raises to Keep Them (Stateline)


Finance and Incentives

Blockchain and Bonds in Berkeley (The Daily Californian)

New Funding Will Revitalize Maine Paper Mill (NewsCenter Maine)

EDA Awards Build Back Better Community of Practice Grant (Economic Development Administration)


Trade

Trade Deficit Grew in Late 2022 (U.S. Bureau of the Census and U.S. Bureau of Economic Analysis)

SEDE Website

Economic Performance

Nearly Every State Sees Employment Gains Over Past Year (Bureau of Labor Statistics) For the 12 months ending in November 2021, nonfarm payroll employment increased in 49 states and the District of Columbia, and was essentially unchanged in 1 state (Wyoming). The largest job increases occurred in California (+821,800), Texas (+698,700), and Florida (+485,600). The largest percentage increases occurred in Hawaii (+8.4 percent), Nevada (+7.4 percent), and Massachusetts (+5.8 percent).

From October to November 2021, nonfarm payroll employment increased in 16 states and was essentially unchanged in 34 states and the District of Columbia in November 2021. The largest job gains occurred in Texas (+75,100), Florida (+51,100), and California (+45,700). The largest percentage increase occurred in North Dakota (+0.8 percent), followed by Florida, Montana, New Jersey, and Texas (+0.6 percent each). 

Unemployment rates were lower in November in 40 states and the District of Columbia and stable in 10 states. Forty-eight states and the District had jobless rate decreases from a year earlier and two states were little changed. The national unemployment rate, 4.2 percent, fell by 0.4 percentage point over the month and was 2.5 points lower than in November 2020. These data are from the BLS Current Employment Statistics program and are seasonally adjusted.

Businesses Continue To See Challenges (U.S. Bureau of the Census) The latest data from the Small Business Pulse Survey and results were based on responses collected January 3 through January 9, 2022. The survey measured the effect of changing business conditions during the coronavirus pandemic, as well as other major events such as hurricanes on our nation’s small businesses. Key findings included:

  • 21.7% of U.S small businesses experienced a moderate decrease in demand for their goods or services compared to what was normal pre-3/13/20. For responses collected 12/27/21-1/2/22, this statistic was 20.7%.
  • 42.4% of U.S small businesses experienced domestic supplier delays and 17.4% experienced foreign supplier delays in the last week. For responses collected 12/27/21-1/2/22, these statistics were 43.3% and 18.4% respectively.
  • 29.6% of U.S. manufacturing small businesses expect to make a capital expenditure in the next 6 months. The national average for all industries was 16.4%.

SEDE Member Profile

Don Pierson, Secretary, Louisiana Economic Development

In January 2016, Louisiana Gov. John Bel Edwards appointed Don Pierson, CEcD, to serve as Secretary of Louisiana Economic Development. Pierson had served as LED Assistant Secretary and Senior Director of Business Development since January 2005.

With executive-level leadership, his duties include the implementation of domestic and international economic development programs, and job retention and creation efforts for the State of Louisiana.

He is Gov. John Bel Edwards’ primary representative to governmental officials, local communities, and site selector consultants on all economic issues. Pierson possesses three decades of economic development experience and is a certified economic development professional. He is a member of the International Economic Development Council (IEDC) Board of Directors.

Economic Outlook

Supply Chain Disruptions and Labor Shortages Temper Growth (Board of Governors of the Federal Reserve Bank) The Federal Reserve “Beige Book” released January 12, 2022, compiles anecdotal information derived from business contacts nationwide. Reports indicated that economic activity across the country expanded at a modest pace in the final weeks of 2021. Contacts indicated growth continued to be constrained by ongoing supply chain disruptions and labor shortages. Tightness in labor markets drove robust wage growth nationwide, with some Districts highlighting additional growth in labor costs associated with non-wage benefits. Besides wage gains, many contacts indicated adjustments to job demands – such as accommodating part-time work or adjusting qualification requirements – to attract more applicants and retain workers. 

Latino Population Is an Untapped Engine for Growth (McKinsey & Company) Entrepreneurship is a recurring theme in McKinsey’s first comprehensive study of Latino economic mobility—The economic state of Latinos in America: The American dream deferred. The study analyzed the roles of Latinos as workers, savers, business owners, and consumers in the US economy. Latinos are an economic engine for the US. They are the fastest growing minority: by 2030, 1 in 5 workers will be Latino. And they have the highest rate of entrepreneurship of any race: their businesses have grown by 12.5 percent over the past five years, compared to 5.3 percent for White-owned businesses. 

But the report also surfaced the challenges Latino entrepreneurs face in securing the capital they need to grow. They rely more on family savings, credit cards, and personal assets to start businesses, and they are less likely to apply for funding because they don’t think they will receive approval. Their businesses also tend to be underrepresented in higher growth industries, and many need to invest in a stronger digital presence, which is critical to grow. One of the insights that surfaced in the research is the fact that any resources or programs focused on supporting economic mobility need to understand the many differences among Latino populations, bucking the common misperception that they are a monolithic group. Distinctions among the population include whether they are US or foreign born and their country of origin.

SEDE Webinars

SBA is Helping the Nation Recover (SEDE Network) The State Economic Development Executive (SEDE) Network hosted a virtual conversation with SBA Administrator Guzman on January 25, 2022. The Administrator touched on a number of topics including the importance of small business to the national economy, to our neighborhoods and to our country’s innovation. She also highlighted the recent small business growth has been supported by the entrepreneurship by women and people of color. She recognized the importance of states economic development efforts and noted that the new SBA Regional Administrators will be working to connect states and their businesses to SBA resources. A recording of the Administrator’s remarks and responses to questions can be found here.

International Trade as a Component of a State’s Economic Strategy. (SEDE Network/EDA ) The State Economic Development Executives (SEDE) network in cooperation with the State International Development Organizations (SIDO), National Association of Development Organizations (NADO), Center for Regional Economic Competitiveness (CREC) and the Commerce Department’s Economic Development Administration (EDA) hosted a January 11, 2022, joint webinar on international engagement between state trade offices and local development districts. Presenters from all organizations, Minnesota and Maine discussed state and local cooperation and alignment in international issues. The slides presented and the webinar video can be found here.

Industry Trends

Industry Trends to Watch as Manufacturers Eye Growth (Deloitte) The recovery gained momentum in 2021 on the heels of vaccine rollout and rising demand. As industrial production and capacity utilization surpassed pre-pandemic levels midyear, strong increases in new orders for all major subsectors signal growth continuing in 2022. However, optimism around revenue growth is held in check by caution from ongoing risks. Workforce shortages and supply chain instability are reducing operational efficiency and margins.

AI in Manufacturing Can Be a Game Changer (NIST) Artificial intelligence (AI) can have many benefits including greater efficiencies, lower costs, improved quality and reduced downtime. This technology is not only for large manufacturers. High-value, cost-effective AI solutions are more accessible than many smaller manufacturers realize. In the recent MEP National Network™/Modern Machine Shop webinar “Artificial Intelligence in Manufacturing: Real World Success Stories and Lessons Learned,” Andy Carr of the South Carolina Manufacturing Extension Partnership and Rick Oppedisano, founder and CEO of Delta Bravo discussed AI solutions that work best for small and medium-sized manufacturers (SMMs). Delta Bravo is a third-party vendor that works with SCMEP manufacturing clients on AI solutions to meet their needs. AI projects improved equipment uptime, increased quality and throughput, and reduced scrap. With the healthier bottom lines and increased profits came lessons learned.

Workforce

Workers Not Skilled Up for Digital Revolution (Information Technology and Innovation Foundation) Although the United States led the global digital revolution, the country is faltering now when it comes to digital skills possessed by the workforce. That is one of the findings of a recent report from the Information Technology and Innovation Foundation (ITIF), which goes on to say that such developments bode poorly for long-term U.S. competitiveness. The report notes that the broader quality of a workforce’s digital skills base is important to the economy as it becomes a key determinant of business and industry competitiveness and innovation capacity. The report also highlights several policy recommendations.

Desperate for State Workers, Governors Offer Raises to Keep Them (Stateline) Like private-sector employers, state agencies nationwide are struggling to find and keep workers amid a tight labor market and burnout because of the COVID-19 pandemic. And governors in both parties, like business owners, are proposing higher pay in a bid to recruit workers and convince them to stay, helped by federal aid and huge budget surpluses in most states. Nationally, pay increases should help attract and retain workers who provide vital public services, from caring for people in state hospitals to clearing snow from highways and managing state prisons.

Finance & Incentives

EDA Awards Build Back Better Community of Practice Grant (Economic Development Administration) To fuel the connection, communication and collaboration of the 60 Build Back Better finalists with a growing a shared body of knowledge to drive the future of American economic development, EDA has launched a Build Back Better Regional Challenge Community of Practice. This initiative is supported through a $3 million grant to the National League of Cities, with sub- awardees America Achieves, the Federation of American Scientists and the Nowak Metro Finance Lab at Drexel University. The grants will run January-September 2022, bringing together all 60 finalists with the goal of supporting the development of strong Phase 2 applications while creating a sense of community and the sharing of best practices.

In partnership with EDA headquarters and its six regional offices, the Community of Practice will work with the finalists to translate their concept proposals into comprehensive, actionable plans that leverage regional assets, build new local partnerships and accelerate their economic vision within their Phase 2 applications. Community of Practice members will each receive a variety of individualized and group technical assistance that includes regular group-wide convenings and peer-to-peer learning opportunities with other finalists. This coalition will bring a wealth of knowledge to the 60 finalists. Among these four partners, areas of expertise include workforce development, equitable economic growth, governance, coalition building, project formulation and planning, and technology-based economic development.

Blockchain and Bonds in Berkeley (The Daily Californian) Berkeley, California is set to become one of the first cities in the nation to incorporate blockchain technology in its municipal bond market, according to a Dec. 23 press release issued by the mayor’s office. This announcement came after a unanimous city council vote granting authorization for the city manager to work with a firm that will provide support to the city in developing a microbond financing program. The city of Berkeley has been working to develop the new blockchain market since 2019, according to the release. The new system will allow municipal bonds to be purchased for $100 or less, as opposed to the $5,000 purchasing minimum on traditional municipal bonds. The city anticipates that blockchain will increase access to municipal bonds.

New Funding Will Revitalize Maine Paper Mill (NewsCenter Maine) Paper mills provided economic boosts and job opportunities for communities for generations. However, as the industry changed over the years, many companies closed their mills around the country and in Maine. The paper mill in Madison, Maine employed residents for decades but closed its doors in 2016. But after Maine-based GO Lab closed on an $85M green bond sale and New Markets Tax Credit transaction, the lights will be turned back on. The money will now enable CIanbro, the lead contractor hired by GO Lab, to build three manufacturing lines that will produce wood fiber insulation. While the market in Europe is worth $700 million annually, according to the company release, this will be the first time the product will be made in North America. The company said it will employ more than 120 people when the site is fully operational, which they expect to happen in 2023. The company will use timber from Maine’s forests for its work in the mill which will also provide a boost to that industry in that part of the state.

Trade

Trade Deficit Grew in Late 2021 (U.S. Bureau of the Census and U.S. Bureau of Economic Analysis) The nation’s goods and services deficit was $80.2 billion in November, up $13.0 billion from $67.2 billion in October. November exports were $224.2 billion, $0.4 billion more than October exports. November imports were $304.4 billion, $13.4 billion more than October imports. 

Exports of goods decreased $2.9 billion to $155.9 billion in November with telecommunications, industrial machines and civilian aircraft engines all slipping slightly. Crude, oil, travel, and transportation both increased modestly helping to boost exports. Regions where the U.S. held trade surpluses included Brazil ($1.0 billion), United Kingdom ($0.5), and Singapore ($0.3). Deficits were recorded with China ($28.4), European Union ($19.4), Mexico ($11.0), Germany ($6.1) and Canada ($5.4).

The SEDE Network Steering Committee includes: Stefan Pryor (RI), Chair; Sandra Watson (AZ), Vice Chair; Julie Anderson (AK); Mike Preston (AR); Kurt Foreman (DE); Don Pierson (LA); Kevin McKinnon (MN); Chris Chung (NC); Alicia Keyes (NM); Michael Brown (NV); Andrew Deye (OH); Dennis Davin (PA); Adriana Cruz (TX); Joan Goldstein (VT); Mike Graney (WV). 

For further questions on the content in this Bulletin or for information on the SEDE Network contact Bob Isaacson, CREC Senior Vice President, at bisaacson@crec.net.