by Pete Julius

Since 2000, new and expanded facility activity has plummeted. This downward spiral has made it extremely difficult for communities to recruit and retain businesses. During this recession, most economic development organizations also witnessed a huge decline in their annual budgets. Simultaneous with these budget decreases, pressure mounted to be more successful with less resources. Globalization has also had a devastating effect on a lot of communities with its demand for higher skilled employees; many communities have been left with an available labor force that possesses unusable skills. The chart below illustrates the dramatic decline in new expanded announcements from 1999-2005.

Source: Conway Data Scoreboard & Whittaker Associates, Inc.

It must be noted that the 2005 numbers are for January – November 2005. All companies within this chart have at least $5 million in sales and a minimum of 25 employees. It is anticipated that the remaining number of new and expanded announcements in December will not be significant enough to actually cause an increase over last year. However, it is possible that the number of expanded facility announcements could actually increase for the first time since 1999 and 2000. An increase in expanded facilities, as well as an increase in new announcements, could provide some momentum for 2006, provided that our healthy economy stays strong. However, the increase will not be significant. This country will continue to lose jobs to overseas’ competition. The jobs that will stay in the U.S. will require higher skills because the work that will continue to go overseas will be commodity and routine-based jobs. We developed a table to gain more insight into which particular industries have been the most active.

The table contains new facility and expanded facility announcements from 1999 to 2005. The table includes industries that announced a minimum of 100 new and expanded facility projects. Each company also contains the same minimum-size companies as those in the chart above. The industries are separated by their three-digit NAICS codes. Even though this table is helpful, it would be much useful if the industries were broken out by more than 3-digit NAICS codes. Nonetheless, it does shed some light on new and expanded activity over the past 7 years.

1999-2005 New Announcements 1999-2005 Expanded Announcements
NAICS NAICS Description Total NAICS NAICS Description Total
541 Professional, Scientific & Technical Services 1,550 336 Transportation Equipment 2,130
336 Transportation Equipment 1,325 332 Fabricated Metal Product 1,276
421 Wholesale Trade, Durable Goods 938 326 Plastics & Rubber 1,238
325 Chemical Manufacturing 873 325 Chemical Manufacturing 1,236
334 Computer & Electronic Product 851 311 Food Manufacturing 1,234
333 Machinery Manufacturing 795 541 Professional, Scientific & Technical Services 1,181
311 Food Manufacturing 752 333 Machinery Manufacturing 1,151
326 Plastics & Rubber 729 334 Computer & Electronic Product 825
332 Fabricated Metal Product 701 331 Primary Metal Fabrication 810
493 Warehousing & Storage 637 322 Paper Manufacturing 602
422 Wholesale Trade, Nondurable Goods 624 421 Wholesale Trade, Durable Goods 590
513 Broadcasting & Telecommunications 471 335 Electrical Equip., Appliance & Component Mfg. 554
339 Miscellaneous Manufacturing 456 321 Wood Product Manufacturing 487
331 Primary Metal Fabrication 418 422 Wholesale Trade, Nondurable Goods 477
321 Wood Product Manufacturing 395 327 Nonmetallic Mineral Product Mfg. 456
514 Information Services & Data Processing 371 323 Printing & Related Support Activities 450
327 Nonmetallic Mineral Product Mfg. 369 233 Building Dev. & General Contracting 441
335 Electrical Equip., Appliance & Component Mfg. 360 337 Furniture & Related Product Mfg. 429
561 Administrative & Support Services 344 339 Miscellaneous Manufacturing 428
524 Insurance Carriers & Related Activities 333 513 Broadcasting & Telecommunications 356
337 Furniture & Related Product Mfg. 330 493 Warehousing & Storage 266
221 Utilities 327 561 Administrative & Support Services 266
322 Paper Manufacturing 287 313 Textile Mills 263
484 Truck Transportation 284 484 Truck Transportation 214
523 Securities, Commodities, Contracts & Other Fin. 256 514 Information Services & Data Processing 213
522 Credit Intermediation & Related Activities 248 524 Insurance Carriers & Related Activities 204
323 Printing & Related Support Activities 247 522 Credit Intermediation & Related Activities 175
531 Real Estate 217 312 Beverage & Tobacco Product Mfg. 170
511 Publishing Industries 170 315 Apparel Manufacturing 157
315 Apparel Manufacturing 159 324 Petroleum & Coal Products Mfg. 152
488 Transportation Support Activities 138 314 Textile Product Mills 151
452 General Merchandise Stores 120 511 Publishing Industries 134
312 Beverage & Tobacco Product Mfg. 118 523 Securities, Commodities, Contracts & Other Fin. 113
481 Air Transportation 108
444 Bldg Material & Garden Equip & Supply Dealers 106

Source: Conway Data Scoreboard & Whittaker Associates, Inc.