9th Annual Rural American South Edition (2004)

Sponsors

ALABAMA: Alagasco www.alagasco.com ARKANSAS: Arkansas Dept. of Economic Development www.1800arkansas.com Electric Cooperatives of Arkansas www.ecark.org FLORIDA: Progress Energy www.progress-energy.com LOUISIANA: Louisiana Dept. of Economic Development www.la.gov and www.lded.state.la.us MISSISSIPPI: Mississippi Development Authority www.mississippi.org NORTH CAROLINA: Progress Energy www.progress-energy.com SCANA www.scana.com/economic SOUTH CAROLINA: SCANA www.scana.com/economic Progress Energy www.progress-energy.com TENNESSEE: Tennessee Dept. of Economic & Community Development www.tnecd.gov/fasttrack VIRGINIA: Virginia Economic Development Partnership www.YesVirginia.org Old Dominion Electric Cooperatives www.odec-ed.com

Introduction

After Five Tough Years, Deals are Back in the Rural South and Manufacturing is Leading the Way

By Mike Randle

When the U.S. economy took a dive almost five years ago, much of the South refused to sink with it. While 2001 and 2002 were years when the South's economy struggled somewhat, it recovered quite nicely in 2003. In calendar year 2003, for example, major job announcements increased in the region from the previous calendar year for the first time since 1997. The biggest indicator that the South's economy didn't tank like other U.S. regions over the last four years can be found in the form of job creation as opposed to job losses. Total non-farm employment in the region grew at about 2 percent from the beginning of 2001 to mid-2004, while the rest of the nation lost about 2 million jobs during that time.

While the South as a whole weathered the latest national economic down cycle well, the rural South did not. From 1993 to 1998, over 100,000 new manufacturing jobs were created in the rural South. All of those new jobs and many more were wiped out by the hundreds of manufacturers that shuttered their doors in the region's small towns and counties since the new Millennium began.

Economic cycles don't last forever, however. Because of that, it looks as if the devastating job losses experienced in the South's rural areas over the last six years is history for now. Plant mortality rates have dropped dramatically this year and new deals are being announced at rates not seen in the rural South since the mid-to-late 1990s. It's clear that a recovery is underway.

Set in this latest Rural American South economic recovery, just one of many over the last 150 years, is a new opportunity. Similar bounce backs in the rural South have seen officials simply go after jobs as they had for decades. More than not, most of those jobs during that time were of the low-wage, low-skill variety. Yet, much of what the South lost over the last five or six years were low-wage, low-skill jobs. The majority of the high-end manufacturers did not close up shop and continue to operate in rural areas of the South. The opportunity the rural South has today centers on whether or not it can recruit more higher-wage, higher-end manufacturers than those cheaper operations so that the brand "the U.S.'s Mexico" can be buried forever.

Since the nation's economy turned down in 2000, economists throughout the world have predicted that certain manufacturing industry sectors that were leaving the U.S. in droves would not come back. Those economists don't know the rural South. After all, the South's rural regions remain the least expensive place in the world's largest consumer nation to manufacture a product. And for those who argue that if costs are the primary factor, then a location offshore is much more inviting, we say, well, not everyone wants to make their products offshore. Even more, there are many high-end, high-cost products for U.S. delivery that cannot be made offshore. That is the opportunity officials in the rural South seek.

There is one thing that is present in all rural South economic recoveries. Unlike its metro areas, the South's rural regions shine when the U.S. economy as a whole is expanding. This latest recession proved that the South's metro areas can expand when the rest of the nation is folding. But the rural South needs a healthy national economy for it to expand and that is now happening.

We invite you to take a look at what the rural South can offer your business. The following pages, representing our Ninth Annual Rural American South section, feature rural success stories from nine Southern states. These stories are just a few positive examples of what is happening in the rural South right now. We hope these stories help you gain a better understanding of what the rural South is all about.

Even though the rural South saw an enormous number of plants close in the last six years, a few did decide to stay. In fact, the following companies operating in the rural South not only stayed, they spent billions collectively while expanded their rural South manufacturing and service operations during some trying economic times. Just a few of those companies are: Lockheed-Martin, Boeing, Honda, Fuji Film, Eastman Chemical, Exxon Mobil, Shell Chemical, Anheuser-Busch, GM, Proctor & Gamble, Nestle USA, BASF, GEICO, America Online, BMW, Martin-Marietta, Nucor, Saturn, Goodyear, Delphi, General Mills, Mercedes-Benz, Toyota, Nissan and Northrop Grumman.