US projects announced from December 2007 through September 2009 reflect a cautious business climate during the recession. The report shows that investors pursue locations with supply chain potential and advantageous resources, input cost and quality, positive state and local tax structures, business incentives and industry clusters.
"The announced projects reflect the general business climate during the recession, which is focused on reducing costs, increasing efficiency and creating new facilities to produce new products, such as clean energy and consumer technologies," said Andrew Phillips, Senior Manager of QUEST. "The nature of these projects – predominantly investments in alternative energy and semiconductors for use in computers, hybrid automobiles and solar panels – indicates the market's trend toward cleaner, leaner technology."
Sectors most affected by the economic downturn, including financial services, real estate and automotive, had significantly lower investment and employment growth than previous years, but continued to make investments in operational infrastructure and customer support facilities.
The average capital investment per job created or retained during the recession was nearly $432,000, compared to $405,000 in 2007 and $324,000 in 2006. Coal gasification, petroleum refining and natural gas projects were the most capital-intensive projects, with average capital investment of nearly $8 million per job created. Energy and industrial facilities accounted for 80% of proposed capital investments. However, 179 new or expanded headquarter facilities were announced, signaling companies' eagerness to revamp management facilities, streamline operations and reduce costs.
"Capital investment is the cornerstone of long-term economic development and even during a recession, states continued to attract capital investments in new facilities," said Tom Neubig, Director of QUEST. "Many states lost jobs, but we saw a number of bright spots, particularly with alternative energy equipment manufacturers, which report greater total investment and employment than in previous years. We can trace this to fundamental market shifts and state and federal policies that encourage investment in this sector."
Top states for mobile capital investment:
•Texas: $13.8 billion
•Ohio: $13.4 billion
•Michigan: $10.0 billion
•North Carolina: $9.5 billion
•Pennsylvania: $9.2 billion
•Montana: $7.5 billion
•Tennessee: $7.0 billion
•Illinois: $6.4 billion
•Kentucky: $5.8 billion
•New York: $5.8 billion
Top states ranked by new and retained mobile project jobs:
•Michigan: 49,162
•Texas: 44,085
•North Carolina: 37,500
•Ohio: 27,900
•Pennsylvania: 26,788
•Indiana: 24,900
•Virginia: 23,100
•Georgia: 16,400
•New York: 15,100
•Florida: 13,600
"Some businesses continued to invest in new facilities and employees despite an uncertain business climate," said Phillips. "States that focus on economic development efforts to attract and retain companies making strategic investments may be positioned for growth as the economy improves."
