Here is today's summary of economic development news, a free service of the Economic Development Partnership of Alabama, representing Alabama's private sector investment in economic development. If you enjoy NewsFlash, thank an EDPA Partner.
United States economic outlook worsens after jobs report
Published: Tuesday, June 05, 2012, 12:42 AM Updated: Tuesday, June 05, 2012, 12:48 AM
WASHINGTON - The faltering U.S. job market has prompted economists to take a much dimmer view of the country's growth prospects. That's a shift from just a few weeks ago, when many were upgrading their forecasts.
Friday's surprisingly bleak jobs report for May followed a spate of disappointing data. Manufacturing activity slowed, an index of home sales fell and consumer confidence tumbled. Mounting troubles in Europe and elsewhere have heightened economists' concerns.
"The latest economic data have been decisively disappointing," Michael Feroli, an economist at JPMorgan Chase, wrote in a client note.
JPMorgan Chase sharply reduced its growth forecast for the July-September quarter to a 2 percent annual rate, down from 3 percent. It cited the weaker U.S. hiring and a likely drop in U.S. exports related to slower growth overseas.
And JPMorgan Chase now forecasts growth of 2.1 percent for 2012, down from 2.3 percent.
Julia Coronado, an economist at BNP Paribas in New York, said she now expects growth of 2.2 percent this year, down from her previous forecast of 2.4 percent. She also revised down her estimate of growth in the April-June quarter to a 2.2 percent annual rate, from a 2.5 percent rate.
"We keep hoping that we're going to turn a corner and move into a stronger phase of recovery, and the door keeps getting slammed shut," Coronado said.
Forecasting firm Macroeconomic Advisers and Swiss bank UBS have also marked down their expectations since Friday's jobs report.
Alabama State Port Authority welcomes new European container service to Mobile
Published: Monday, June 04, 2012, 4:54 PM Updated: Monday, June 04, 2012, 5:04 PM
-- The first vessel in a new weekly direct call service to and from north European ports docked Sunday in Mobile, the Alabama State Port Authority said.
The post-Panamax sized container ship the MSC LAURA, the biggest container ship to ever call Mobile, docked Sunday morning at APM Terminals Mobile. The ship was part of Mediterranean Shipping's weekly direct call service to Mobile to and from the north European ports of Antwerp, Belgium; Felixstowe, England; Bremerhaven, Germany and Le Havre, France.
Jimmy Lyons, director and chief executive for the Port Authority said the new service is instrumental in expanding efficient and cost effective shipping options for its growing service region.
"Our ability to handle post-Panamax vessels is very important to us as we go forward." he said. "This new call service is just another step in the growth of Mobile and proving Mobile is a viable container gateway."
Boeing's new 747-8 cargo jet lands at Huntsville International Airport
Published: Monday, June 04, 2012, 1:29 PM Updated: Monday, June 04, 2012, 1:43 PM
HUNTSVILLE, Alabama -- The newest member of Panalpina's fleet arrived at Huntsville International Airport just after 11 a.m. today.
The Boeing 747-8 cargo plane, which debuted at Everett, Wash., last week, touched down at 11:05 a.m. in Huntsville.
The aircraft, operated by Atlas Air, is 18.3 feel longer and 13 feet wider than the Boeing 747-4 that it is replacing.
The new capacity will allow Panalpina to carry 20 more tons of cargo on each flight.
Panalpina operates 10 scheduled flights a week at Huntsville International Airport from Europe, Mexico, Hong Kong and Brazil.
The company launched its all-cargo air-freight service between Luxembourg and Huntsville in September 1990. It was the first time a freight-forwarding company offered a scheduled cargo service between Europe and North America.
Entrepreneur operates 3 companies at University of Alabama business incubator
By Patrick Rupinski
TUSCALOOSA | There might be a use after all for the kudzu draping the Southeast's rural landscape. It might someday help fuel your car.
This summer, chemical engineers working for a company at UA's Alabama Innovation and Mentoring of Entrepreneurs Building, a research center for budding entrepreneurs, will start making larger batches of a sugary syrup-like substance that could be used in the production of ethanol.
The base for the syrup will be such organic items as wood chips, grasses, pond algae or even kudzu, said Rusty Sutterlin, who heads Inventure, one of three young companies he has operating in AIME's business incubator. All the companies are trying to develop innovative products.
So far, Inventure has used small reactors in its AIME laboratory that can make an ounce or two of the commercial grade syrup, but Sutterlin said ethanol makers interested in testing the syrups in their ethanol production don't want a few ounces of the liquid. They need it by the gallon, he said.
A larger reactor that will be installed at the AIME building this summer will address that.
Brookley Aeroplex's evolution continues for new, existing tenants
Published: Tuesday, June 05, 2012, 6:56 AM
The evolution of Brookley Aeroplex continues. Not only is the Aeroplex attracting new business prospects, but recent infrastructure improvements provide a better experience for new and existing tenants, suppliers and visitors.
The mission of the Brookley Aeroplex is to create a world-class industrial park that offers business and industry unsurpassed logistics and high-quality amenities, combined with a synergistic working environment where they can thrive.
This objective translates into two measurable goals: retain and help grow existing tenants, and provide an atmosphere for the Mobile Bay region to attract new prospects for development.
The good news is that even during the "Great Recession," Brookley Aeroplex remained an example of sustainable growth.
That growth is reflected in the Aeroplex's increase in tenant activity. Thanks to new tenants and numerous expansions of existing tenants, the Aeroplex revenues have grown more than 20 percent when compared to 2008. Those funds are being funneled back into the infrastructure, allowing much-needed improvements to be made.
The Mobile Airport Authority, which manages Brookley, welcomed new or expanded companies including: Liquid Environmental Solutions, Regent Aerospace, Specialty Steel, Aerostar, ASF Intermodal, Transport America, Army Aviation Center Federal Credit Union, Signature Flight Support and the Occupational Health Center. Together these companies added nearly 100 jobs to the Mobile area.
Regionalism is crucial for economic development
Published: Monday, June 04, 2012, 9:49 PM
Regionalism seems to be the topic du jour for everything from economic development to disaster recovery to tourism. I can speak to one of those areas, economic development, and assure you taking a regional approach to industry recruiting is crucial.
I don't mean the Mobile Area Chamber of Commerce just talks about working with our partners in Baldwin County and beyond, but the organization's mission and its staff walk the walk. We are 100 percent committed to regionalism rather than just pay it lip service.
It is undeniable that should a major project creating thousands of jobs locate in Baldwin County, Mobile County will reap benefits as well. In fact, I would submit that many other surrounding counties would benefit as well, including Washington, Clarke, Escambia and Choctaw. And that is not to mention the counties in neighboring states. And just as that is the case, the converse is true as well. The point being, as the old saying goes, a rising tide raises all boats.
To that end, the economic development efforts of Baldwin and Mobile counties should not be seen as competitive, but as cooperative. For example, the Lower Alabama Partnership, a regional marketing group made up of Mobile, Baldwin and Covington counties along with the Coastal Gateway Regional Economic Development Alliance, sponsored a recent consultant's event in Atlanta and hosted a joint dinner for several site location consultants and project multipliers. We have joined together and done joint marketing events for more than five years, and it has truly made an impression and had a positive effect on our project load for all partners involved.
Economy benefits from closing the deal
Published: Monday, June 04, 2012, 7:42 PM
In May, I served as a resource/mentor at an economic development young professional's round table in Atlanta, sponsored by the Southern Economic Development Council.
For 90 minutes, economic developers under the age of 35, most with less than two years' worth of economic development experience, rotated between tables manned by Ops, or old professionals. Each table had a topic, like Community Development, Workforce Development, or Dealing with Railroads.
My topic was "Closing the Deal," and the table stayed full because few subjects have more meaning to economic developers. When we close the deal, jobs and capital investment are created in the community. There is a direct economic benefit to those who receive new jobs; those who build, expand or renovate the facility and/or sell products to the new company.
But there is also an indirect benefit -- a big part of what is often referred to as the multiplier effect. It accrues to local government in the form of retail sales taxes generated by employee purchases, or through property taxes generated when those employees buy or upgrade housing, autos and other such things. Indirect benefit also accrues to the retailers, banks, car dealers, restaurants and other entities that derive sales/income from the new company's payroll -- the money employees spend locally.
Manufacturing usually has a very large multiplier effect, because generally, most of the new income that is multiplied comes from somewhere else. The product is manufactured locally but sold regionally, nationally or even internationally. Automotive manufacturing probably has the largest multiplier, often estimated as high as five times the payroll. Much of that multiplier is the direct result of automotive suppliers that move into the area.
Tourism also has a nice multiplier, with those dollars being brought into our area from elsewhere and staying with us through lodging, retail and restaurant sales and/or dollars spent on recreational activities.
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Enjoy the day,
Wendy Wallace Johnson