State Economic Development Bulletin – March 2022

 

State Economic Development Bulletin

Headlines:

Economic Performance

Economic Outlook

SEDE News

Trade

Industry Trends

Workforce

Finance and Incentives

Economic Performance

Economic Growth Continues Despite Uncertainty (Federal Reserve System) Economic activity is expanding at a modest to moderate pace since mid-January with many Districts reporting that the surge in COVID-19 cases temporarily disrupted business activity as firms faced heighted absenteeism. Some Districts cited severe winter weather as the cause of generally weaker consumer spending. Although manufacturing activity continued to grow at a modest pace, all Districts noted that supply chain issues and low inventories continued to restrain growth, particularly in the construction sector. Reports from banking contacts indicated some weakening of financial conditions, although loan demand was generally unchanged. The economic outlook over the next six months remained stable and generally optimistic, although reports highlighted an elevated degree of uncertainty. On the labor front, firms continued to increase compensation and introduce workplace flexibility to attract workers—especially in historically low wage positions—with mixed success. The report was based on information collected on or before February 18, 2022 and does not reflect any economic changes due to the events in the Ukraine.

Economic Outlook

Ukraine War Is Having Serious Human and Economic Impacts (International Monetary Fund) The IMF Executive Board noted that the war is resulting in tragic loss of life and human suffering, as well as causing massive damage to Ukraine’s physical infrastructure. Unprecedented sanctions have been announced on Russia and while the situation remains highly fluid and the outlook is subject to extraordinary uncertainty, the economic consequences are already very serious. Energy and commodity prices—including wheat and other grains—have surged, adding to inflationary pressures from supply chain disruptions and the rebound from the Covid‑19 pandemic. Price shocks will have an impact worldwide, especially on poor households for whom food and fuel are a higher proportion of expenses. Should the conflict escalate, the economic damage would be even more devastating. The sanctions on Russia will also have a substantial impact on the global economy and financial markets, with significant spillovers to other countries.

SEDE News

Alicia J. Keyes, Cabinet Secretary, New Mexico Economic Development

Spotlight: Alicia J. Keyes – Cabinet Secretary, New Mexico Economic Development Prior to joining Governor Michelle Lujan Grisham’s cabinet, Alicia J. Keyes was the Director of the Albuquerque Film, Television and Media Office under Mayor Tim Keller. During her time with Keller’s administration, Keyes was instrumental in initiating and closing the recent deal with Netflix in which the company purchased ABQ Studios and committed to spend $1 Billion in production. Before working with the City of Albuquerque, Keyes was the Executive Director of Worldwide Acquisitions and Co-production for the Walt Disney Company. She was responsible for the acquisition of theatrical motion pictures for distribution including domestic and international rights.

Keyes began in the entertainment business working for Joel Fields and Len Hill developing television movies. Keyes grew up in Albuquerque, New Mexico, graduated from the Albuquerque Academy in 1993 and then received her bachelor’s degree at Claremont McKenna College in Politics, Philosophy and Economics. She adopted twin boys, Charles and Alexander Touche, who followed in their mother’s footsteps and graduated from the Academy in 2017. They now attend Cornell and Penn State Universities.

SEDE Webinars: SEDE Network participants and staff are invited to attend.

  • DEI and Manufacturing Please join the American Manufacturing Communities Collaborative, The Century Foundation, and the Urban Manufacturing Alliance for a 60-minute briefing and panel discussion on infusing diversity, equity, and inclusion into the American manufacturing sector.
  • Incentives Roundtable: New Findings on Remote Worker Attraction Programs As more people work from – and live – anywhere, states and localities are increasingly offering incentives targeting remote workers. This roundtable will present findings from recent evaluations of 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.

Trade

National Leadership Needed on International Trade (U.S. Chamber of Commerce) President and CEO Suzanne Clark highlighted some of key issues affecting trade in her State of American Business address earlier this year. She noted that understanding the global environment is imperative for the U.S. business community. For that reason, the U.S. Chamber tracks the biggest global trends which will have huge implications for global business in the year ahead. Here are some of the major trends the Chamber is tracking in 2022:

  • Covid-19: Light at the end of the tunnel?
  • Growth: Strong but slowing
  • Inflation: Not just “transitory.”
  • Trade: The boom continues
  • Supply Chains: Slowly normalizing
  • China: Business strong, but concerns mount
  • Trade Agreements: Multiplying
  • Digitalization: Accelerating.
  • Direct Investment: On the rebound.
  • Energy Transition: Charging ahead

This address was based on information collected prior to the events in the Ukraine.

Industry Trends

DOD Reviews Supply Chain Vulnerabilities (U.S. Department of Defense) DOD’s recent report, Securing Defense-Critical Supply Chains, reviews the nation’s supply chain and recognizes the need for bold action in support of supply chain security. DOD notes that supply chain resilience has become a top-of-mind issue in a way it has not been for decades and notes that companies are rapidly modernizing supply chains. The report adds that numerous Congressional proposals and laws have signaled an intent to build domestic industrial capabilities and work with allies and international partners to build resilience.

The report highlights four strategic enablers – workforce (see below), cyber posture, manufacturing, and small business – that create operational and strategic risk; addressing the challenges in each is critical to building overall supply chain resilience. The report also outlines certain foundational recommendations to enhance and grow the industrial base.

Innovation Emphasized in State of the Union Address (SSTI) In the State of the Union speech delivered on March 1, President Biden frequently addressed innovation. Semiconductor manufacturing incentives and supply chains for advanced industries were among the sectors that received particular attention. The message included a specific request that Congress pass the Senate’s U.S. Innovation and Competition Act (originally the Endless Frontier Act) and the House’s America COMPETES Act. In addition to funding for semiconductor incentives, this legislation would authorize a multi-billion-dollar Regional Technology Hubs program, expand the National Science Foundation to include an innovation-focused directorate, and several other related initiatives.

Workforce

Downward Trends in Worker Migration Continue (U.S. Census Bureau) The COVID-19 pandemic did not stop a decline in the nation’s mover rate which in 2021 was at a seven-decade low, according to the Current Population Survey Annual Social and Economic Supplement. The 2021 mover rate was less than half what it was in 1948. In 2021, 8.4% of people lived in a different residence one year ago, down from 9.3% in 2020. A falling mover rate is nothing new – over the past five years, both the annual mover rate and number of movers fell in most years. Nearly half of all movers in 2021 cited housing-related reasons for moving, which were also the most prevalent reasons given for moves from 2017 to 2021. The next most prevalent reasons for moving in those years were family-related reasons and job-related reasons.

Businesses Filling Vacancies With Workers With “Unique Abilities” (NIST) The Manufacturing Innovation Blog discussed how manufacturers can redefine inclusion outside of the traditional categories of marginalized people to help solve labor supply challenges. The article presented three keys for finding previously-overlooked workers:

  • Change your perspective. Workers have unique abilities – and are not “disabled” or “special needs;” rather, they are “uniquely abled,” whose skills may include focus, attention to detail and patience with long and intricate processes.
  • Understand that you’re not alone. There is a whole ecosystem of employment-focused organizations that want to place and support people with unique abilities in companies. These organizations can help employers make the case internally, prepare a culture and offer ideas for a successful inclusion effort.
  • Reach out and have a conversation. It might take a little bit of searching, but there likely is a nearby nonprofit ready to support hiring efforts. These organizations work to remove the typical workplace obstacles and will also work with employers to help them understand how other people think, learn, and communicate so that the business can build internal supports for a diverse workforce.

Finance & Incentives

More Than $270 Million Awarded in Broadband Grants (National Telecommunications and Information Administration) The U.S. Department of Commerce announced that it awarded 13 grants as part of the Broadband Infrastructure Program. These grants, totaling more than $277 million, were awarded to 12 states and one territory: Georgia, Guam, Kentucky, Louisiana, Maine, Mississippi, Missouri, Nevada, North Carolina, Pennsylvania, Texas, Washington, and West Virginia. More information on each of these grant projects is provided in the table below.

The Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law, provides a historic $65 billion investment to expand broadband in communities across the U.S. NTIA is preparing to launch a series of new broadband grant programs funded by the law that will build broadband infrastructure across the country, create more low-cost broadband service options, and address the digital equity and inclusion needs in our communities. The Broadband Infrastructure Program was designed to support broadband infrastructure deployment in unserved areas, especially rural areas. 

BMW Announces Major Expansion of South Carolina Facility (Upstate Business Journal) BMW will invest $200 million to expand its Spartanburg operation, a move that will bring an additional to 200 jobs to the area. The expansion comes in the form of a 219,000-square-foot body panel production facility expected to be online by summer 2024. Reports indicate that the facility will produce doors, fenders, exterior body panels and liftgates. Governor Henry McMaster is pursuing training incentives for BMW.

XNRGY Announces $300 Million Investment in Arizona (Area Development) XNERGY, one of the largest custom air handling manufacturers in North America, announced the planned construction of a new cutting-edge manufacturing facility in the Greater Phoenix area, which will be designated as their headquarters. XNRGY’s state-of-the-art 1 million-square-foot facility represents an estimated $300 million investment, creating more than 900 jobs for residents over time. 

AES Clean Technology Adds Pennsylvania Location (The Mercury) AEC Clean Technology, a manufacturer and builder of cleanroom facilities, will invest $14.2 million to open a new manufacturing facility in Manheim Borough within Lancaster County. It will be the second Pennsylvania location for the company. The company received a proposal from the Department of Community and Economic Development for a $485,000 Pennsylvania First grant and a $97,000 workforce development grant to help the company train workers.

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); 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.