Transcript Governor`s Focus on Economic Development

VIRGINIA’S ECONOMIC DEVELOPMENT LANDSCAPE
HAMPTON ROADS ASSOCIATION OF
FINANCIAL PROFESSIONALS
ROBERT W. MCCLINTOCK
RESEARCH DIRECTOR
FEBRUARY 16, 2010
VIRGINIA UNEMPLOYMENT
Unemployment Rate
By MSA
United States
9.7
Virginia
6.7
Blacksburg
7.5
Charlottesville
5.4
Danville
11.8
Harrisonburg
5.7
Bristol
9.5
Lynchburg
7.2
Richmond
7.8
Roanoke
7.3
Hampton Roads
6.9
Northern Virginia
4.9
Winchester
7.2
0
5
10
Percent (%)
Note: Includes Virginia Portion Only
Source: U.S. Bureau of Labor Statistics, LAUS, December 2009 (not seasonally adjusted)
15
VIRGINIA UNEMPLOYMENT
VIRGINIA UNEMPLOYMENT
United States, Virginia, and Hampton Roads MSA
6.0
4.0
2.0
Percent (%)
8.0
10.0
Unemployment Rate
Jan 2000
Jan 2002
Jan 2004
Jan 2006
Jan 2008
Jan 2001
Jan 2003
Jan 2005
Jan 2007
Jan 2009
United States
Hampton Roads MSA
Source: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted)
Virginia
Virginia Employment By MSA
December 2009
21%
Blacksburg
Danville
Harrisonburg
Northern Virginia
Richmond
Winchester, VA-WV
Source: Bureau of Labor Statistics: CES Monthly Data, December 2009
Charlottesville
Hampton Roads
Lynchburg
Other localities
Roanoke
VIRGINIA EMPLOYMENT GROWTH
Employment Growth
0.0
-2.0
-4.0
Percent (%)
2.0
4.0
United States, Virginia, and Hampton Roads MSA
Jan 2000
Jan 2002
Jan 2004
Jan 2006
Jan 2008
Jan 2001
Jan 2003
Jan 2005
Jan 2007
Jan 2009
United States
Virginia
Hampton Roads MSA
Source: U.S. Bureau of Labor Statistics, CES
Measured in percent change in S.A. nonfarm payrolls year-over-year; Virginia and Hampton Roads data not seasonally adjusted.
VIRGINIA EMPLOYMENT GROWTH
Employment Growth
Annual Percentage Change, 2009
United States
-3.7
Virginia
-2.4
Blacksburg
-0.5
Charlottesville
-1.9
Danville
-1.7
Harrisonburg
-0.8
Bristol
-3.3
Lynchburg
0.1
Richmond
-3.1
Roanoke
-1.6
Hampton Roads
-0.8
Northern Virginia
Winchester
-0.8
-4.4
-4
Source: U.S. Bureau of Labor Statistics, CES
December 2009 is preliminary, not seasonally adjusted.
-3
-2
Percent (%)
-1
0
VIRGINIA EMPLOYMENT GROWTH
Nonagricultural Employment Growth
By Major Sector
2.2
1.7
Educ. & Health Services
0.1
Government
1.1
-5.9
Nat. Res. & Mining
0.7
-4.5
Financial Activities
-1.0
-2.1
Leisure & Hospitality
-1.3
-5.6
Prof. & Bus. Services
-2.5
-4.2
Trade, Trans. & Util.
-3.1
-4.7
Information
-8.1
-10.7
Manufacturing
Construction
-8.8
-13.5
-12.3
-3.7
Total Nonagriculture
-2.4
-15
-10
-5
Percent (%)
United States
Percentage Change from Previous Year
Source: Bureau of Labor Statistics, CES, annual data, seasonally adjusted
0
Virginia
5
VIRGINIA EMPLOYMENT GROWTH
Nonagricultural Employment Growth
By Major Sector
1.6
2.1
Educ. & Health Services
1.1
0.9
Government
-2.5
Prof. & Business Services
0.7
-1.3
Leisure and Hospitality
0.4
-1.1
-1.5
Finance
-3.0
-2.6
Trade, Trans. & Util.
-8.8
Manufacturing
Nat. Res. & Mining and Const.
-4.2
-11.7
-6.2
-8.1
-7.6
Information
-2.4
Total Nonagriculture
-15
-0.8
-10
Virginia
-5
Percent (%)
0
Hampton Roads
Percentage Change from Previous Year, 2009
Source: Bureau of Labor Statistics, CES, annual data, not seasonally adjusted
5
Economists are terrible at forecasting,
but it’s going to be a slog.
- Paul Volker
Chairman, President’s Economic Recovery Advisory Board
Former Federal Reserve Chairman (1979-1987)
Source: Bloomberg BusinessWeek, January 11, 2010
VIRGINIA GDP GROWTH
Virginia Real GDP Growth
Percent Change in 2000 Chained Dollars
4
4.4
Average Growth: 3.2%
2
1.8
1.7
1
1.3
0.4
0
Percent (%)
3
3.2
2006
2007
Source: BEA, Moody's Economy.com
2008
2009F
2010F
2011F
Virginia Employment Growth in First Year of Recovery
100
98
95
Index
103
105
Latest Recession Versus Previous Four Recessions
0
1
2
3
4
5
6
7
8
Months in Recovery
1973 Recession
1990 Recession
Since June 2009
9
10
1981 Recession
2001 Recession
Month 0 = End of Recession
Source: Bureau of Labor Statistics: CES Monthly Data (not seasonally adjusted)
11
12
VIRGINIA EMPLOYMENT FORECAST
Employment Growth Forecast
2
Virginia and Hampton Roads MSA
1.5
0
-0.2
-0.2
-0.8
-0.9
-2
-1
-0.1
-2.4
-3
Percent (%)
1
1.7
2008
2009
Virginia
2010F
Hampton Roads MSA
Percentage Change from Previous Year
Source: Bureau of Labor Statistics, BEA, Bureau of Census:CBP, Moody's Economy.com
2011F
VIRGINIA’S TARGET SECTORS
Advanced Manufacturing
Security & Services
•
•
•
•
• Federal Security Agencies &
Providers
• Information Technology
• Finance, Insurance, HQ
• Professional & Business Services
Pharmaceuticals
Chemicals
Food processing
Natural Resources
Science & Research
Transportation
•
•
•
•
•
•
•
•
Biotechnology/R&D
Nanotechnology
Emerging Industries
Medical/Federal Labs
Automotive
Aerospace
Global Logistics
Distribution
MARQUEE ANNOUNCEMENTS
Fairfax County
Incentives: $6,160,400
New Jobs: 401
Average Salary: $115,000
Investment: $118,000,000
Central Virginia
Hampton Roads
Northern Virginia
Fairfax County
Incentives: $8,600,000
New Jobs: 1,200
Average Salary: $106,290
Investment: $25,000,000
Southside Virginia
Southwestern Virginia
Valley
Russell County
Incentives: $2,945,000
New Jobs: 650
Average Salary: $41,653
Investment: $22,700,000
City of Richmond
Incentives: $7,610,000
New Jobs: 400 (200 Saved)
Average Salary: $90,000
Investment: $80,000,000
Rockingham County
Incentives: $1,267,200
New Jobs: 12
Average Salary: $48,500
Investment: $229,000,000
City of Danville
Incentives: $12,040,800
New Jobs: 740
Average Salary: $27,310
Investment: $281,000,000
Prince George County
Incentives: $56,847,200
New Jobs: 642
Average Salary: $73,548
Investment: $501,400,000
City of Newport News
Gloucester County
Incentives: $29,000,000
New Jobs: 1,000
Average Salary: $40,000
Investment: $600,000,000
PROJECTED IMPACT OF MARQUEE ANNOUNCEMENTS TO
THE COMMONWEALTH
•
•
•
•
•
•
Incentives Awarded: $124,470,600
New Jobs Created: 5,045
Jobs Saved: 200
Capital Investment: $1,857,100,000
10-Year State Revenue: $342,637,451
20-Year State Revenue: $817,542,679
ANNOUNCED INVESTMENT AND EMPLOYMENT
2008
2009
Investment
$5.1 billion
$3.3 billion
Jobs
21,651
17,241
Announcements
350
289
All announcements are subject to revision.
ANNOUNCED INVESTMENT AND EMPLOYMENT
Regional Totals – Calendar Year 2009
Central Virginia
4,338
Investment
(millions)
$430.98
Hampton Roads
2,967
$614.42
51
Northern Virginia
6,307
$1,658.08
99
Southside Virginia
1,451
$339.97
30
Southwestern Virginia
1,147
$84.19
23
Valley Region
1,031
$161.92
37
Virginia Total
17,241
$3,289.56
289
Region
New Jobs
All announcements are subject to revision.
Announcements
49
SELECTED STATEWIDE PROJECTS - 2009
Company Name
Location
Business
Jobs
Investment
(millions)
Visa
Digital Realty Trust
Loudoun Co.
Loudoun Co.
Data center
Real estate management
400
50
$458
$350
The Ignite Institute
Bank of America
Fairfax Co.
Henrico Co.
Medical research institute
Banking operations center
415
196
$200
$166
DARPA
Arlington Co.
Research and development
280
$165
Harris Teeter
King George Co. Distribution center, food products
335
$101
Defense Intelligence Agency
Albemarle Co.
Operations center
800
$100
SAIC
Fairfax County
Corporate headquarters
1,200
$25
Alpha Natural Resources
Bristol
HQ; mining, coal preparation facilities
69
$21
Hilton Hotels Corporation
Fairfax Co.
Corporate HQ; hotels
325
$17
SPARTA Composite Products
Suffolk
Composite products for aerospace, defense
198
$13
Hill Phoenix
Chesterfield Co. Manufactures refrigerated display cases
410
$9
Tyson Foods (2 projects)
Multiple
Poultry processing
355
$10
Admiral America
Henrico Co.
U.S. HQ; auto insurance operations center
318
$3
SELECTED HAMPTON ROADS PROJECTS - 2009
Company Name
Location
Business
Jobs
Investment
(millions)
ADS
Alcoa Howmet Castings
Virginia Beach
Hampton
Corporate HQ, military tactical equipment
Complex investment cast turbine airfoils
107
25
$18.10
$25.00
ARAI Americas
Virginia Beach
Sealing solutions, elastomer products
150
$1.75
300
1,000
$0.00
$230.00
0
$20.00
AVID Medical
James City Co.
Northrop Grumman Newport News Newport News
Healthcare equipment
Shipbuilding and repair
Owens-Illinois
James City Co.
Manufactures glass bottles
Serco
Virginia Beach
Engineering services, technology solutions
118
$0.00
SPARTA Composite Products
Suffolk
Composite products for aerospace, defense
198
$13.20
Sprint Nextel
Hampton
Support center, telecommunications
150
$0.00
STIHL
Virginia Beach
U.S. HQ, Hand-held power tools
0
$55.00
Western Refining
York Co.
Oil refinery
22
$175.00
RECENT TRENDS IN VEDP’S PIPELINE
• Improving volume of prospect inquiries
• Recent uptick in manufacturing projects
• Considerable “competitive consolidation” projects
underway
• Wide range of energy projects
• Project financing issues still widespread
• Data centers
• “Stimulus” funding led to questionable projects
• Distribution projects not yet back on radar
BIG PICTURE ISSUES FOR VIRGINIA
• Regions in transition (ex. International Paper – Franklin/Isle of
Wight)
• Workforce training/retraining delivery system
• Remaining internationally competitive; address emerging
markets
• Dealing with transportation
• Alignment of assets (incentives, sites, universities) with key
targets
– Biotech/life sciences
– Energy
• Exploiting supply chain opportunities (ex. Rolls-Royce)
• Capitalizing on unique features – NASA Wallops Island
GOVERNOR’S FOCUS ON ECONOMIC DEVELOPMENT
• Governor McDonnell has
introduced several budget
amendments focused on
economic development and
job creation.
Governor Robert F. McDonnell
GOVERNOR’S FOCUS ON ECONOMIC DEVELOPMENT
Job Creating Budget Amendments:
• Increase Governor’s Opportunity Fund in FY 2011 by
$12.1 million
• Commit $5 million in FY 2011 to an industrial mega-site
fund
• Allocate $2 million over the biennium to establish state
economic development offices in China, India and the
U.K.
• Increase funding for Virginia Tourism Corporation by
$3.6 million and increase Governor’s Motion Picture
Opportunity Fund to $2 million
GOVERNOR’S ECONOMIC DEVELOPMENT TEAM
Lt. Gov. Bill Bolling
Jim Cheng
Robert Sledd
Chief Jobs Creation
Officer
Secretary of Commerce
and Trade
Senior Economic Advisor
RECENT ACCOLADES
• Named “Best State for Business” by Forbes.com for four
consecutive years.
• In July, Virginia was named “Top State for Business” by CNBC.
• In June, ranked “No. 1 Pro-Business State” by Pollina Corporate
Real Estate, Inc.
• Ranked second in “Best State to Start a Business” by U.S.
News & World Report.
• Also in June, the Commonwealth ranked second in Directorship
magazine’s first annual Boardroom Guide to the Best States for
Business.
SO HOW DO YOU PREPARE FOR 2010?