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 Announcements1999-2005 Expanded Announcements
NAICSNAICS DescriptionTotalNAICSNAICS DescriptionTotal
541Professional, Scientific & Technical Services1,550336Transportation Equipment2,130
336Transportation Equipment1,325332Fabricated Metal Product1,276
421Wholesale Trade, Durable Goods938326Plastics & Rubber1,238
325Chemical Manufacturing873325Chemical Manufacturing1,236
334Computer & Electronic Product851311Food Manufacturing1,234
333Machinery Manufacturing795541Professional, Scientific & Technical Services1,181
311Food Manufacturing752333Machinery Manufacturing1,151
326Plastics & Rubber729334Computer & Electronic Product825
332Fabricated Metal Product701331Primary Metal Fabrication810
493Warehousing & Storage637322Paper Manufacturing602
422Wholesale Trade, Nondurable Goods624421Wholesale Trade, Durable Goods590
513Broadcasting & Telecommunications471335Electrical Equip., Appliance & Component Mfg.554
339Miscellaneous Manufacturing456321Wood Product Manufacturing487
331Primary Metal Fabrication418422Wholesale Trade, Nondurable Goods477
321Wood Product Manufacturing395327Nonmetallic Mineral Product Mfg.456
514Information Services & Data Processing371323Printing & Related Support Activities450
327Nonmetallic Mineral Product Mfg.369233Building Dev. & General Contracting441
335Electrical Equip., Appliance & Component Mfg.360337Furniture & Related Product Mfg.429
561Administrative & Support Services344339Miscellaneous Manufacturing428
524Insurance Carriers & Related Activities333513Broadcasting & Telecommunications356
337Furniture & Related Product Mfg.330493Warehousing & Storage266
221Utilities327561Administrative & Support Services266
322Paper Manufacturing287313Textile Mills263
484Truck Transportation284484Truck Transportation214
523Securities, Commodities, Contracts & Other Fin.256514Information Services & Data Processing213
522Credit Intermediation & Related Activities248524Insurance Carriers & Related Activities204
323Printing & Related Support Activities247522Credit Intermediation & Related Activities175
531Real Estate217312Beverage & Tobacco Product Mfg.170
511Publishing Industries170315Apparel Manufacturing157
315Apparel Manufacturing159324Petroleum & Coal Products Mfg.152
488Transportation Support Activities138314Textile Product Mills151
452General Merchandise Stores120511Publishing Industries134
312Beverage & Tobacco Product Mfg.118523Securities, Commodities, Contracts & Other Fin.113
481Air Transportation108
444Bldg Material & Garden Equip & Supply Dealers106

Source: Conway Data Scoreboard & Whittaker Associates, Inc.