SEDE Hosts Meeting for Top Executives (SEDE) The State Economic Development Executives (SEDE) Network is holding its Winter meeting for state economic development executives or their deputies in Phoenix on December 9^th immediately preceding the SSTI Annual Conference. Sandra Watson, The SEDE Chair and the President/CEO of the Arizona Commerce Authority will be hosting the meeting. The agenda will include discussions of current issues facing states and many opportunities for networking among the state economic development commissioners, secretaries and executive directors or their top deputy. Registration will be available in September.

Department of Energy Announces $63M to Advance Battery Recycling and Smart Manufacturing (DOE) The U.S. Department of Energy announced the availability of up to $63 million to enable state and local governments to expand battery recycling and modernize American manufacturing by making cutting edge technologies like advanced sensors and modeling more accessible to small- and medium-sized manufacturers. This funding opportunity includes $22 million towards the second phase of the $50 million total State Manufacturing Leadership Program. In this second phase, DOE aims to expand this state-led support to reach even more SMMs. DOE seeks applications that facilitate SMM access to resources such as technical assistance, training, facility assessments, apprenticeships, and direct financial assistance to implement smart manufacturing improvements. Competitive funding awards of up to $2 million per project to state entities will be made over an up-to three-year period. Full applications are due Monday, September 16.

Department of Energy Announces $24M to Further Expand Clean Energy Workforce (DOE) The U.S. Department of Energy announced 21 new projects selected to receive $24 million from the Bipartisan Infrastructure Law to bolster the development of clean energy workforce training programs – with a focus on jobs that do not require a four-year degree – within union training programs, community colleges, and trade schools across the country. The selected projects will expand DOE’s existing Industrial Training and Assessment Centers (ITAC), formerly known as the Industrial Assessment Centers (IACs), network which trains energy-efficiency workers to help small- and medium-sized manufacturers (SMMs) reduce their carbon emissions and energy costs. Aligned with the Justice40 Initiative, an estimated 50% of the funding will be for organizations that serve disadvantaged communities, and also includes seven institutions federally recognized Minority-Serving Institutions.

Commerce Announces New $25M Good Jobs Challenge NOFO (EDA) The U.S. Department of Commerce’s Economic Development Administration launched a new phase of funding for the Good jobs Challenge. This funding opportunity builds on the success of the first round of the Good Jobs Challenge awards, funded by the American Rescue Plan, and this round will invest $25 million into high-quality, locally led workforce training programs that lead to good jobs. The Notice of Funding Opportunity (NOFO) the Department is launching today will support sectoral partnerships that bring together diverse stakeholders including employers, labor unions, educational institutions, training organizations, community-based organizations, and others to develop high-quality training programs that lead directly to a good job. EDA anticipates making 5-8 awards ranging from $1 million to $8 million, which are anticipated to be announced in winter 2024.

Commerce Announces $184M for Six Recompete Program Awardees (EDA) The EDA announced $184 million in implementation grants for six Recompete Finalists. These awards will create renewed opportunity in economically distressed communities through good-paying, high-quality jobs and improve access to the workforce for Americans. The Distressed Area Recompete Pilot Program (Recompete) is a key part of the Biden-Harris Investing in America agenda. The program was authorized by the CHIPS and Science Act and targets areas where prime-age (25-54 years) employment is significantly lower than the national average, with the goal of closing this gap through flexible, locally driven investments. EDA has selected six implementation awards for funding from the 22 Recompete Finalists.

SSBCI Updates from SSTI and the Department of Treasury (SSTI) The U.S. Department of the Treasury has made multiple announcements about the State Small Business Credit Initiative (SSBCI) in recent weeks, including new program approvals, providing an update on uses of funds through the first two years of the program, and highlighting venture capital success stories, and releasing a database of participating lenders. Treasury has approved applications for $8.7 billion in SSBCI funding for capital programs, including nearly $415 million for 221 Tribal governments. To date, jurisdictions have expended over $750 million in SSBCI funding, resulting in over $3.2 billion in overall new financing, including $2.8 billion in private financing. The professional, scientific, and technical services sector has the largest cumulative transaction amounts as of the summary’s publication, with just over half a billion dollars spread over 438 transactions.

How to Build the CEDS Strategy Committee (NADO) Comprehensive Economic Development Strategy (CEDS) Committee members are integral partners to Economic Development Districts (EDDs) in driving regional economic growth. To ensure that identified strategies are relevant and sourced from the region, the CEDS must be led by a CEDS Strategy Committee that is comprised of regional economic development stakeholders. This brief highlights best practices and tips for building a strong CEDS Strategy Committee and helps EDDs identify regional stakeholders that have the political will, funding capacity, and expertise to encourage smart economic development through the CEDS planning process.

Webinars

August 20: Workforce Development Incentives Webinar (Pew Charitable Trusts) Many states use workforce and job training incentives to encourage business growth and close skills gaps. Some of these incentives are targeted toward specific populations, while others provide financial assistance to support training more broadly. Please join The Pew Charitable Trusts on Tuesday, August 20, at 2:00PM ET for a webinar featuring Ellen Miller, chief economic development and quantitative analyst for Virginia’s Joint Legislative Audit and Review Commission, and Ellen Harpel, founder of Smart Incentives, to explore approaches to evaluating workforce development and job training incentives. Register here.

*Economy 💰*

The Fed’s High Rates Spur Fear of Slowdown, Yet Recession Signals Have So Far Proved Wrong (Associated Press) The turmoil shaking global financial markets reflects a sudden fear that the Federal Reserve may have held its key interest rate too high for too long, heightening the risk of a U.S. recession. The latest red flag was Friday’s July jobs report from the Labor Department, which showed that the unemployment rate rose from 4.1% to 4.3% — still a relatively low level but the highest rate in nearly three years. Markets panicked after the report was released. Financial markets and most economists now think the Fed will end up cutting rates fairly quickly this year, in part to offset economic weakness. Some analysts have speculated that the Fed could reduce its rate at an emergency meeting before September. But most economists doubt that the officials would take such a step, unless there were further signs of economic weakness.

U.S. Economy Grows Strongly in July as Service Sector Resilience Offsets Manufacturing (Seeking Alpha) July saw another strong expansion of business activity in the service sector, according to S&P Global’s PMI surveys, which over the past three months has enjoyed its best growth spell for two years. The robust service sector growth contrasts with the deteriorating picture seen in the manufacturing sector in July, where output came close to stalling. While manufacturers are reporting reduced demand for goods, this in part reflected a further switching of spending from consumers towards services such as travel and recreation. However, healthcare and financial services are also reporting buoyant growth, fueling a widening divergence between the manufacturing and service economies in recent months. Thanks to the relatively large size of the service sector, the July PMI surveys are indicative of the economy continuing to grow at the start of the third quarter at a rate comparable to GDP, rising at a solid annualized 2.2% pace. While that is below the 2.8% recorded in the second quarter, according to official first estimates, it still represents a healthy upturn and compares favorably with recent signs of stalling growth in the eurozone during July.

*Trade 📈*

Services Exports are a Critical and Growing Part of the Economy (Marketplace) When you think of American exports, you probably think of goods, like soybeans or airplane wings, which are grown or made in the U.S., put on a cargo ship and then bought by someone abroad. While goods do make up the bulk of American trade, services exports are also a critical and growing part of the domestic economy. They have been a positive contributor to GDP growth for almost every quarter over the past three years. Certain industries, like financial services and insurance, the U.S. is known for, along with sharing the arts or education abroad. Advances in technology have made it easier to buy and sell services across borders and has contributed to the rise in U.S. services exports. The U.S. exports more services than it imports and continues to increase its international customer base.

U.S. Trade Deficit Narrows in June (AgWeb) The U.S. trade deficit narrowed to $73.1 billion in June, a decrease from $75.0 billion in May. This reduction was driven by a significant increase in exports, which rose $3.9 billion to $265.9 billion, while imports increased $2.0 billion to $339.0 billion. The decrease in the trade deficit suggests a shift in the balance of trade, influenced by various economic factors. These factors include cooler domestic demand, moderating pace of consumer spending, and business investment trends. The narrowing of the trade deficit has implications for overall GDP growth. Net exports, which are the difference between exports and imports, can influence GDP. With cooler domestic demand and moderating consumer spending and business investment, imports are likely to ease, potentially turning net exports into a neutral or even positive factor for GDP growth. This shift can help offset some of the negative impacts of reduced domestic consumption and investment.

*Industry Trends 💡*

World’s Five Leading Chipmakers Have Now Promised U.S. Investment (The New York Times) South Korean chipmaker, SK Hynix, will be awarded up to $450 million in grants to help build its new chip facility in Indiana, in what officials described as a milestone in rebuilding the U.S. semiconductor manufacturing industry. With the announcement, the United States now has commitments from all five of the world’s leading-edge semiconductor manufacturers to construct chip plants in the United States with financial assistance. The Semiconductor Industry Association, a trade group, has estimated that the new investments will help the United States triple its domestic chip manufacturing capacity by 2032, raising America’s share of world chip manufacturing to 14% by 2032. The roughly $30 billion in total public investment has been accompanied by commitments from private companies to invest more than $300 billion in the United States, Commerce Department officials said. That is helping to create more than 100,000 jobs.

New Analysis Finds Economic Benefits from Clean Energy Transition (Business Insider) A new financial analysis by Siebert Williams Shank (SWS) finds that the projected infrastructure cost of the clean energy transition, while substantial, will be a worthwhile investment that could yield enormous economic benefits in the United States. The study estimates that while the electric infrastructure costs of the transition are about $10 trillion over the next 30-50 years, the net financial benefits to the U.S. economy could ultimately exceed $2.3 trillion annually. SWS’s clean energy transition report is relatively unique in two ways. First, while most such reports focus on the aggregate costs for all sectors in the transition, the SWS analysis breaks down the transition’s implications for the electricity industries more specifically. Second, the report focuses on economics rather than climate change. Rarely is there deliberation over the full economic consequences of the proposed transition other than a potential reduction in carbon emissions for the environment. Learn more here.

*Workforce ⚒️*

What Can Geolocation Data Tell Us About Childcare Use? (Federal Reserve Bank of Chicago) In the U.S., many parents of young children may not have enough childcare providers near them, which may limit not only their childcare access but also their employment opportunities. In this article, data on people’s visiting patterns to childcare providers is explored to show how it may help inform understanding of the geographic distances between where families live and where providers operate, as well as how these distances and the capacity of providers can affect childcare access. It was found that in the fourth quarter of 2022, half of the families that traveled to one of the childcare providers analyzed in the study traveled at least 3 miles from home. This distance has been increasing in recent years, but the upward trend was interrupted during the early phases of the pandemic in 2020. The decline in childcare access made evident by increasing distances to childcare providers and their decreasing effective capacity following the early phases of the pandemic may be making life more complicated for working parents with young children.

Commerce Invests $2.3M to Support Entrepreneurship Growth in West Virginia (EDA) The U.S. Economic Development Administration (EDA) is investing $2.3 million in West Virginia to support small businesses and entrepreneurs. The Center for Applied Research & Technology, Inc. in Princeton will receive $1.5 million to establish the WV CREATE Center, providing support to small businesses and entrepreneurs. This project will be matched with $365,000 in local funds. The High Technology Foundation, in Fairmont, will receive $848,800 in operational expenses for a statewide collaborative entrepreneurial assistance program. This EDA investment will be matched with $212,200 in local funds. These projects are funded under the Assistance to Coal Communities (ACC) initiative, through which EDA awards funds on a competitive basis to assist communities severely impacted by the declining use of coal. ACC projects support economic diversification, job creation, capital investment, workforce development, and re-employment opportunities.

Innovative Program Trains Welders for Manufacturing Workforce (WAMC Northeast Public Radio) A graduation ceremony was held recently for individuals participating in a welding training program in New York. It’s part of an effort by regional manufacturers, educators and the North Country Chamber of Commerce to make sure workforce needs are being met. The Clinton Community College Welding Academy is an intensive three-week program conducted by professional welders and includes welding types, safety fundamentals, and blueprint reading. The training program started when a manufacturer told the Chamber an upcoming contract would need a large number of welders. The latest New York state budget included funding to continue the welding academy. The welding academy has graduated 36 students with a goal of 50. The next class begins this fall.

Here’s How SC Plans to Use a $12M Grant for a Manufacturing Boom (Post and Courier Columbia) Blythewood, South Carolina recently was confirmed to be the new location of electric vehicle manufacturing plant Scout Motors, which will result in $2 billion in investments and an estimated 4,000 new jobs in the Columbia-area. The challenge is finding workers to begin working for the company by 2026. The technical college system received $12.6 million in federal grants at the beginning of July to be used for workforce development. Around $3 million of that funding will go toward constructing and paying for the technology for a mobile training lab that’ll provide job training in areas like robotics and mechatronics. Once the mobile lab is up and running, the plan is for it to be transported to more rural counties for a few weeks at a time to offer training that wouldn’t otherwise be available to high school and technical college students. The remaining funding will be used to keep the training lab staffed for the next five years, along with scholarships and funding for students who want to utilize the training. The training will allow students, both those completing degree programs and those who just want or need the specific job training, to earn industry-accepted certificates.

City of Birmingham Awarded $20M Federal Grant to Strengthen Workforce (WIAT Birmingham) A $20 million grant from the U.S. Department of Commerce plans to knock down employment barriers in north Birmingham, Alabama. The City of Birmingham was awarded the grant as part of the “Distressed Area Recompete Pilot Program” from the department’s Economic Development Administration. The funding will be used towards a workforce training center, expansion of micro-transit options, and the creation of a Birmingham Black Business Entrepreneurship Center that serves as a physical front door for Black businesses to launch and scale operations. The grant will also fund the establishment of a childcare center, featuring extended hours to accommodate those who have to work early.

*Business Expansions and Incentives 📊*

Cenovus Energy Investing $1.5B to Modernize Ohio Facilities (RGP Northwest Ohio) Husky Marketing and Supply Company, a wholly owned subsidiary of Cenovus Energy, is building out its local team and adding as many as 115 additional jobs in its Dublin, Ohio office, pending local approvals. In addition, Cenovus is making a significant investment in its Lima and Oregon refineries in Northwest Ohio, representing a total investment of over $1.5 billion in Ohio, over the next five years. The new jobs will be high-paying and establish a new headquarters in Central Ohio within a vitally important sector. Cenovus Energy is an integrating energy company with oil and natural gas production.

International Manufacturing Group Expanding to Pennsylvania (WJET Erie) SECO/WARWICK group is expanding its manufacturing capacity from Europe to a facility I Crawford County Business Park, Pennsylvania. The group is the leading vacuum furnace manufacturing producer around the world. The new facility is being supported by a $2 million grant through the Pennsylvania Department of Community and Economic Development, which covers 50% of their investment. The company already has an office in the business park, but in order to improve response to their customers’ needs in North America, the president said it was a must to move into the United States from Europe.

STIHL Invests Over $60M in Battery Manufacturing Efforts (Cision) The conversion to battery-powered tools continues to be the leading trend in the outdoor power equipment industry and the fastest-growing market segment, and STIHL is at the forefront of this battery transformation. Through 2025, STIHL Inc. will have invested over $60 million towards battery manufacturing, including the production of battery-powered blowers, pruners, trimmers, and multi-attachment tools, as well as the assembly of over five different battery packs to power those units at its state-of-the-art factory in Virginia Beach, Virginia. Since its inception in 1974, the STIHL Inc. campus evolved from a single 20,000-square-foot rented warehouse to well over 1.5 million square feet of manufacturing and administrative space on more than 150 acres. In Virginia Beach, as a result of record sales over several years, operations expanded by nearly 50 percent, resulting in over 1,000 new U.S. manufacturing jobs since 2020.

Ice Cream Giant Wells Enterprises Plans $425M New York Expansion (Transport Topics) Wells Enterprises will invest $425 million to expand its ice cream manufacturing facility in Dunkirk, New York, nearly doubling the plant’s size and quadrupling production capacity. The expansion, one of the largest single private investments ever in Chautauqua County, will add 270 new jobs and retain 380 full-time positions at the facility. The Dunkirk facility will expand to 350,000 square feet, adding new production lines and a chocolate ingredient manufacturing facility. The expansion will allow Wells to create new product offerings and increase its market presence. Production on the new lines is expected to begin next August. New York state is supporting the expansion with up to $12 million in jobs program tax credits and a $6 million economic development grant in exchange for job creation and capital investments. The county’s industrial development agency is working with Wells’ managers to help expedite the project.

The State Economic Development Executives (SEDE) Network engages in regular events throughout the year. State Economic Development.org lists these activities and offers an interactive forum for discussion among peers. The SEDE Steering Committee includes: Sandra Watson (AZ), Chair; Joan Goldstein (VT), Vice-Chair; Kurt Foreman (DE); Kevin McKinnon (MN); Christopher Chung (NC); Andrew Deye (OH); Sophorn Cheang (OR); Adriana Cruz (TX); and Mike Graney (WV).

Allison Ulaky of the Center for Regional Economic Competitiveness (CREC) led the development of this Bulletin; for questions on the content in this Bulletin or for information on the SEDE Network contact Bob Isaacson, CREC Senior Vice President.

State Economic Development Executives Network (SEDE)

State Economic Development Bulletin – Issue 72, August 2024

HEADLINES