2004 SB&D Investment 100

A Solid Rebound

Investment 100 Improves by $4 Billion Over Last Year

By Mike Randle

The 100-largest capital investments made in the South in 2002 -- the 2003 SB&D Investment 100 -- totaled a mere $18.3 billion, the lowest sum since 1995. Likewise, the $50 million threshold from last year was the lowest since 1995. But unlike the SB&D Job 100, which had seen diminishing job totals for six straight years, the Investment 100's dollar value has only been dwindling for three years. Like that six-year string of downer years on the job side, the three-year decline on the investment side of the ledger has ended.

This year's SB&D Investment 100 totaled $22.1 billion, or almost $4 billion more than what the top 100 investments added up to last year. While the $22.1 billion figure is encouraging, it is not an outstanding total. Other than last year, it's the lowest total since 1998. Well, then again, it is and it isn't. The last several years saw power plants populate the Investment 100 in droves. Many of those were never built, so the Investment 100 totals in 2000, 2001 and 2002 were undoubtedly inflated. That being the case, this year's total may indeed be outstanding compared to recent years.

In addition to a larger capital investment sum generated by the South's 100-largest corporate and industrial expenditures, the threshold of the Investment 100 rose for the first time in three years to $55 million. That figure pales in comparison to years' 1997-2002, however, when the threshold never dipped below $72 million. Yet, an improvement over last year is nothing to gripe about, especially these days.

Chart No. 1

SB&D Investment 100 1993-2004

Total Investment Threshold
1993 $15.5 Billion $50 Million
1994 $17.4 Billion $50 Million
1995
$18.8 Billion $50 Million
1996 $22.6 Billion $68 Million
1997 $23.8 Billion $72 Million
1998 $19.8 Billion $70 Million
1999 $22.6 Billion $75 Million
2000
$24.6 Billion $80 Million
2001
$25.8 Billion $80 Million
2002
$25.0 Billion $78 Million
2003
$18.3 Billion $50 Million
2004 $22.1 Billion $55 Million

Top Deals Making this Year's SB&D Investment 100

Deals at the top of this year's Investment 100 are familiar ones. The automotive, electronics, oil and gas, and electric power industries are represented, as they almost always are. It's good to see a semiconductor deal at the top of the Investment 100. But there's something different about this chip plant investment. Texas Instruments' new plant in Dallas is the first new semiconductor facility built in the South since 1997 and it's a big one. The last semiconductor deal to rank No. 1 on the Investment 100 was Atmel's expansion in Irving, Tex. in 2000. But that was a $1 billion expansion. TI's deal in Dallas is new and the investment was announced at $3 billion.

Toyota's $800 million pickup truck plant in San Antonio ranked second in this year's Investment 100, followed by a couple of other semiconductor deals and a few liquid natural gas plants. After several years of dominating the top of the Investment 100, only two power plants made it onto the top 10. The most intriguing deals making the Investment 100 this year were two huge biotech announcements. Howard Hughes Medical in Loudoun Co., Va. and the Scripps Research Institute in Palm Beach Co., Fla., remind us of why so many communities and states in the South are preparing themselves for the biotech industry. Those two deals accounted for nearly $700 million in capital investment and are two of the largest life sciences announcements ever made in the American South.

Industry Trends: Automotive is King!

If the experts aren't convinced that the automotive industry is the No. 1 growth industry sector in the South right now, then they need to read this year's Investment 100, specifically adjoining Chart No. 2. Clearly at the top of the investment heap is the automotive industry with 15 deals with investments of $55 million or more and 15 with $30 million to $54.99 million. Earning 225 points, the automotive industry dominated the South's largest investments in calendar year 2003.

With the automotive industry placing second in the Job 100 and first in the Investment 100, there's no question now that original equipment manufacturers and parts suppliers have had a greater positive effect on the South's economy than any other industry. Really, that's been the case for several years now. But the data contained here should dismiss any remaining arguments that may exist. Fact is, the automotive industry is here and it's here to stay (go to www.SouthernAutoCorridor.com for more information).

What's equally as important as job and investment growth in today's outsourced economy is that in 2003 there were just a handful of plant closures in the transportation equipment industry. We counted less than 10. And since there are over 4,000 automotive related plants operating in the South, 10 closures is not even a blip on the screen.


Chart No. 2

SB&D Investment 100 - Top 10 Industries

  Inv 100 Inv JMD Points
Automotive 15 15 225
Oil and Gas 14 5 165
Distribution 8 7 115
Health Care 5 8 90
Food Products 5 7 85
Aerospace/Aviation 5 6 80
Headquarters 3 10 80
Electric Power 7 0 70
Chemicals 5 1 55
Plastics 3 4 50

SB&D Investment 100 - Other Selected Industries

Wood and Paper 2 5 45
Electronics 4 1 45
Biotech 4 0 40
Government 2 4 40
Financial Services 2 3 35
Pharmaceuticals 3 0 30
Metal Products 1 4 30
Ship Building 2 0 20
Info Tech 0 4 20
Education 1 1 15
Agribusiness 1 0 10
Mining 1 0 10
Printing/Publishing 1 0 10
Gaming 1 0 10

A Dozen States Improve Their Lot

If you've already read the Job 100, then you know that eight of 17 Southern states turned more big deals this year than they did the year before. That beats the 2003 Job 100 when only five states could improve their big job deal totals from 2002.

This year, an even more encouraging development has occurred in the Investment 100. There are an even dozen Southern states that improved upon their big investment deals from last year. Yes, 12 of the South's 17 states landed more deals of $30 million or more than 2003's Investment 100. The largest increases came from Virginia and Texas. Virginia posted but 11 deals of $30 million or more last year. This year the Old Dominion posted an impressive 26 big deals on the investment board, second to Texas' 28.

Other Southern states improving their Investment 100 lot this year include Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Missouri and North Carolina. States with the largest losses in big investment deals compared to last year include Kansas, Oklahoma, South Carolina, Tennessee and West Virginia.

Chart No. 3

2004 SB&D Investment 100: Deals $30 Million or More 2004, 2003 vs. 12-Year Average

  2004 2003 Average
Alabama 15 15 12
Arkansas 2 2 2
Florida 15 12 9
Georgia 15 12 16
Kansas 2 6 5
Kentucky 16 9 12
Louisiana 21 15 17
Maryland 3 0 2
Mississippi 14 9 9
Missouri 13 11 6
North Carolina 11 8 19
Oklahoma 1 8 7
South Carolina 7 13 10
Tennessee 2 9 12
Texas 28 18 47
Virginia 26 11 19
West Virginia 4 10 5