State Economic Development Bulletin – April 2022

 

State Economic Development Bulletin

Headlines:

Economic Performance

Economic Outlook

SEDE News

  1. Incentives Roundtable: New Findings on Remote Worker Attraction Programs
  2. Diversity, Equity, and Inclusion in the Mfg. Sector: A Briefing From a Practitioner and Policy Lens

Trade 

Workforce

Finance and Incentives

Economic Performance

U.S. Economy Not Letting War, Pandemic Get in the Way of a Good Time (Reuters) Fear that the war in Ukraine would tilt the U.S. economy towards a 1970s-style bout of stagflation has given way to signs that Americans plan to keep traveling, returning to restaurants, and continuing a steady if still incomplete return to “normal.” The data below indicates that Americans are eating at home less and spending more on restaurants, travel, and recreation – despite the war in Europe and ongoing pandemic.

The job market provided similar news. The latest nonfarm payrolls report released Friday showed employers added 431,000 jobs in March and the unemployment rate fell to 3.6%, continuing a strong run of hiring that has left key aspects of the U.S. labor market “little different” from where they were before the pandemic, the Bureau of Labor Statistics reported.

Widespread Growth in Gross Domestic Product (US Bureau of Economic Analysis) Real gross domestic product (GDP) increased in 47 states and the District of Columbia in the fourth quarter of 2021, as real GDP for the nation increased at an annual rate of 6.9 percent. The percent change in real GDP in the fourth quarter ranged from 10.1 percent in Texas to –2.3 percent in Iowa. Information services; professional, scientific, and technical services; and real estate and rental and leasing were the leading contributors to the increase in real GDP nationally.

Businesses Hampered by Absenteeism (Federal Reserve Bank of New York) With the Omicron variant of COVID-19 surging across the region in December and into January, the Federal Reserve Bank of New York queried businesses on the degree of absenteeism they were seeing in January. Somewhat over half of service firms and more than three in five manufacturers characterized absenteeism as unusually high. When asked specifically what percentage of staff had at least one day of unscheduled absence this January, and what the comparable percentage was in a typical (pre-pandemic) January, both manufacturers and service firms reported the average incidence to be roughly 12 percent three months ago versus about 5 percent in a typical January.

Economic Outlook

U.S. Services Sector Regains Momentum; Inflation Clouds Outlook (Reuters) U.S. services industry activity picked up in March, boosted by the rollback of pandemic restrictions, but higher prices for fuel and other commodities because of Russia’s war against Ukraine are creating uncertainty for many businesses. The Institute for Supply Management’s survey on April 5th showed capacity constraints and inflation remained major challenges, though the labor crunch had eased. The improvement in labor supply was confirmed by March’s employment report on Friday, which showed nonfarm payrolls increased by 431,000 jobs last month.

SEDE News

Mike Graney

Deputy Secretary, West Virginia Department of Commerce

Spotlight: Mike Graney – Deputy Secretary, West Virginia Department of Commerce In 2021, Michael Graney was appointed to Deputy Secretary of Commerce. He continues his work and passion regarding economic development in West Virginia, with the mission of diversifying the state’s economy and job creation. Michael’s past work included an appointment to the post of Executive Director of the West Virginia Development Office by Governor Jim Justice in 2018. He earned his MBA from the University of Virginia Darden Graduate School of Business in 1990 which he used during much of his professional career in executive or co-founder positions with companies related to the petroleum industry. In those roles, he was responsible for managing different facets of business – acquisition, retail operations and environmental compliance – and included serving as president of One Stop, a chain of convenience stores based in West Virginia from 2001 to 2015. Michael has been a member of numerous oil industry professional organizations and has been active in many community and civic service groups.

SEDE Webinars:

  • Incentives Roundtable: New Findings on Remote Worker Attraction Programs This April 5th roundtable featured state and local practitioners discussing two of the longest-standing remote worker attraction programs: the Vermont New Remote Workers Grant Program and Tulsa Remote, both launched in 2018. As early adopters of remote worker incentives, both places offer important lessons to communities that offer or are considering offering incentives to attract remote workers. Please use link above to access the full slide deck and recording.
  • Diversity, Equity, and Inclusion in the Mfg. Sector: A Briefing From a Practitioner and Policy Lens This March 30th webinar featured representatives from the American Manufacturing Communities Collaborative, The Century Foundation, and the Urban Manufacturing Alliance during a panel discussion on infusing diversity, equity, and inclusion into the American manufacturing sector. Please use link above to access the recording and full slide deck, including information on accessing a DEI Toolkit produced by stakeholders in the Pittsburgh region.

SEDE Incentives Workshop The highly regarded workshop on managing business incentive compliance will be offered again for state agency staff on June 13, 2022, in conjunction with the C2ER Annual Conference in Columbus, OH. There is no fee for participants who are registered for the conference. This Incentives Compliance Workshop is designed for economic development staff and leaders engaged in incentive compliance management and reporting roles within their organizations. Our partner, Ellen Harpel of Smart Incentives, will be the lead instructor for the course. Past attendees have highlighted the interactive content and noted that they learned much from the course materials and their colleagues. Questions? Please contact Bob Isaacson.

SEDE Hosts Meeting for Top Executives After nearly three years, the State Economic Development Executives (SEDE) Network is hosting an in-person meeting in conjunction with the SelectUSA Investment Summit. The SEDE meetings will begin the afternoon of Saturday, June 25th and conclude at 3 pm on Sunday June 26th, in time for participants to fully engage in the Summit’s opening events. The agenda will include presentations by federal partners, discussions of hot issues facing states and many opportunities for networking among the state economic development commissioners, secretaries and executive directors or their top deputy. More information forthcoming.

Trade

U.S. Current-Account Deficit Widens in 2021 (US Bureau of Economic Analysis) Although the U.S. trade deficit widened by $169.4 billion in 2021, the U.S. maintained a services export surplus, although the surplus shrank by $15.3 billion. Overall, the U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, widened by $205.5 billion, or 33.4 percent, to $821.6 billion in 2021.

North American Transborder Freight Value Nears $114 Billion (U.S. Bureau of Transportation Statistics) Transborder freight between the U.S. and North American countries (Canada and Mexico) in January 2022:

  • Total transborder freight: $113.7 billion of transborder freight moved by all modes of transportation, up 20.6% compared to January 2021. January 2022 transborder freight was up 17.1% compared to $97.1 billion in January 2020.
  • Freight between the U.S. and Canada totaled $56.8B. Freight between the U.S. and Mexico totaled $56.9B.
  • Trucks moved $69.0 billion of freight, up 12.9% compared to January 2021.
  • Railways moved $15.5 billion of freight, up 11.8% compared to January 2021.

Workforce

Telework During the COVID-19 Pandemic (Bureau of Labor Statistics) Using new data, the 2021 Business Response Survey, a large, nationally representative survey of U.S. private sector businesses, generated unique estimates of telework patterns during the coronavirus disease 2019 (COVID-19) pandemic. Between July and September 2021, 13 percent of all U.S. private sector jobs involved teleworking full time and 9 percent involved teleworking some of the time. Telework was less common in establishments that increased base wages during the pandemic. The share of establishments that increased telework was larger among establishments that started offering flexible work hours or compressed work schedules after the pandemic hit. Telework was also associated with reductions in workplace square footage and relocation. Within each industry sector, low-paying establishments had a smaller share of jobs that involved telework.

The New Geography of Remote Work (Upwork) Using a new survey of over 23,000 people in the U.S., Upwork found that remote work continues to influence Americans’ plans to move. Furthermore, a review of the existing evidence on the geographical impact of remote work shows that change is already underway. Key Findings:

  • Remote work has already sparked moves: 2.4% of people, or 4.9 million Americans, say that they have already moved because of remote work, since 2020.
  • More moves to come: 9.3% of people, or 18.9 million Americans, are planning on moving because of remote work, compared to 6.1% in October 2020.
  • People are moving outside commutable distances: 28% of people said they are moving more than 4 hours away. Another 13% said they are moving between two and four hours away.
  • Cities most likely to see people move away will likely meet a few criteria: Areas with both high cost of living and many jobs that can be done remotely are the most likely to experience out-migration. This is likely to include superstar cities like San Francisco and New York City.
  • The effects of remote work on geography are just beginning to unfold: The number of people who have relocated is likely just the start of a larger reshuffle, since our data suggests that there are strong reasons to suspect longer-term moves will rise.

The Future of Work in 2022 and Beyond (Forbes) A new report from Ivanti [an IT company] examines the trends of the “Everywhere Workplace” and its implications on the future of work. With the effects of COVID-19 finally starting to recede, businesses are considering the question, “What now?” What does “normal” look like going forward? The Ivanti survey found that nearly 9 out of 10 (87%) survey respondents do not want to work from the office full-time. Nearly half (45%) would be happy to never step foot in an office again, while 42% indicated that they prefer a hybrid model that splits time between home and office. One interesting stat is that 71% stated that they would choose to be able to work from anywhere over a job promotion or compensation increase.

Finance & Incentives

Battery Manufacturer to Employ Thousands in Arizona Expansion (The Center Square) Queen Creek, Arizona will soon be home to a large new battery manufacturing facility. LG Energy Solution (LGES) announced last month that it is investing $1.4 billion to build its first-ever cylindrical-type battery facility in North America. The company expects that this new facility will employ a few thousand people. Construction of the facility will begin this summer, and production is expected to commence in 2024. Cylindrical batteries offer “high-density, compact energy storage,” making them appropriate for use in electric vehicles.

Indiana Announces $189 Million in Broadband Grants (IPB News) More than 52,000 Hoosier homes and businesses will be able to connect to broadband through grants announced in April. The latest round of awards totals $189 million across 80 counties. This is the third round of funding through the state’s broadband grants program. The money goes to telecom companies and providers who then connect unserved communities. Governor Holcomb said while the focus so far is those who don’t have internet, the state is also expanding its focus as the program moves forward to include those with inadequate broadband coverage.

StateEconomicDevelopment.org The SEDE Network engages in regular activities throughout the year. The State Economic Development Executives (SEDE) Network Steering Committee includes: Stefan Pryor (RI), Chair; Sandra Watson (AZ), Vice Chair; Mike Preston (AR); Kurt Foreman (DE); Don Pierson (LA); Kevin McKinnon (MN); Chris Chung (NC); Alicia Keyes (NM); Michael Brown (NV); Andrew Deye (OH); Sophorn Cheang (OR);  Adriana Cruz (TX); Joan Goldstein (VT); Lisa Brown (WA); 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.