regional economic development brief

8/16/2019 Regional economic development brief

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May 2016 Huntsville Regional Economic Growth Initiative page | 1CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

REGIONALECONOMIC DEVELOPMENT

BRIEFCHAM BE R O F CO M M E RCE O F HUN T S V ILLE /M ADIS O N CO UN T Y


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May 2016 Huntsville Regional Economic Growth Initiative CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY page | 2

Table of Contents

Huntsville Regional Economic Growth Initiative . . . . . . . . . 3

2016 State of the Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

UAH Economic Impact Study. . . . . . . . . . . . . . . . . . . . . . . . 17


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HREGI Investors as of May 6, 2016

DEVELOPMENT COUNCIL

CHAIRMAN’S COUNCIL

ADTRAN, Inc. | The Boeing Company | City of Madison | Emerson Network Power - Avocent

Redstone Federal Credit Union | Remington Outdoor Company

LEADERSHIP FORUM

DEVELOPMENT PARTNER

PRESIDENT’S CIRCLE

Huntsville Hospital | Regions BankMadison County Commission

REGIONAL PARTNERS

Port of Huntsville | Tennessee Valley Authority


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May 2016 State of the Economy page | 6RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

2016 STATE OF THE ECO NOMY

M E A S U R I N G E C O N O M I C P E R F O R M A N C E


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Population Density

10,173 - 14,511 7,487 - 10,172 5,147 - 7,486 3,250 - 5,146 592 - 3,249

Redstone Arsenal

HuntsvilleMadison

Athens

M A D I S O N C O U N T Y

L I M E S T

O N E C O U N T Y

2015 Total Population (Esri) by Census Tracts

More than 9,000 new jobs over the past 3 years

5-year projection: 8.5% growth; 38,000 new residents

Expected to grow beyond 500,000 people by 2023


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Population Growth Trends

Population Growth 2010-2015 | Southeast Metros

Huntsville is one of the Top 40 fastest growing major metros in the country.

Myrtle Beach, SC

Fort Myers, FL

Orlando, FL

Charleston, SCFayetteville, AR

Sarasota, FL

Nashville, TN

Lakeland, FL

Atlanta, GA

Miami, FL

Jacksonville, FL

Port St. Lucie, FL

Tampa, FL

Huntsville, AL

Pensacola, FL

Greenville, SC

Lexington, KYNew Orleans, LA

Daytona Beach, FL

Columbia, SC

14.1%

13.1%

11.6%

11.5% 10.3%

9.3%

9.2%

7.8%

7.7%

7.6%

7.4%

7.0%

6.7%

6.1%

6.0%

5.9%

5.7% 5.6%

5.5%

5.2%

#14 in the South


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Population Growth Trends

Population Growth 2010-2015

Huntsville accounted for 34% of Alabama’s growth.

Alabama 79,243

Huntsville 27,159

Remainder

of Alabama (65 counties)

66%

Huntsville (2 counties)

34%


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Bureau of Economic Analysis Metrics

Gross Domestic Product Growth 2001-2014

The Huntsville economy continued to grow during the recession.

60%

50%

40%

30%

20%

10%

0%

Huntsville 54%

$7.7 billionmore per year

(25% of Alabama’stotal growth)

United States

Alabama

24%21%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014


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Gross Domestic Product Growth 2001-2014 | U.S. Metros

Huntsville GDP growth is among the Top 10 major metros in the country.

Austin, TX

Portland, OR

Fayetteville, AR

Provo, UT

San Jose, CA

Durham, NC

Bakersfield, CA

McAllen, TX

Huntsville, AL

Dallas, TX

Raleigh, NCCorpus Christi, TX

Charleston, SC

San Antonio, TX

Houson, TX

Des Moines, IA

Nashville, TNKilleen, TX

Baton Rouge, LA

Charlotte, NC

78%

76%

74%

71%

64%

59%

57%

57%

54%

52%

50% 49%

46%

46%

45%

44%

43% 42%

42%

40%

#2 in the South


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20%

15%

10%

5%

0%

-5%2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Bureau of Labor Statistics Metrics

Employment Growth 2001-2015

Huntsville 18%

United States

Alabama

7%

2%

Huntsville added more than 33,700 new net jobs (88% of total Alabama growth).


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Fort Myers, FL

Fayetteville, AR

Port St. Lucie, FL

Charleston, SC

Orlando, FL

Nashville, TN

Myrtle Beach, SC

Sarasota, FL

Baton Rouge, LA

Huntsville, AL Jacksonville, FL

Daytona Beach, FL

Lakeland, FL

Miami, FL

Knoxville, TN

Columbia, SC

Atlanta, GA

Lafayette, LA

Lexington, KY

Tampa, FL

40%

38%

30%

29%

28%

25%

24%

21%

20%

18% 15%

15%

15%

14%

14%

13%

12%

11%

10%

10%

Huntsville is one of the Top 10 major metros in the South for employment growth.

#10 in the South


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Alabama

33,742Huntsville

38,258

Huntsville’s employment growth was 88% of the Alabama total.


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Wage & Salary Growth 2001-2014 (adjusted for inflation)

30%

25%

20%

15%

10%

5%

0%

-5%2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Huntsville 28%$1.9 billion

more per year

United States

Alabama

13% 9%

Huntsville wage growth was not affected by the recession, but by sequestration.


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Wage & Salary Growth 2001-2014 (adjusted for inflation)

Fayetteville, AR

McAllen, TX

Houston, TX

Provo, UT

Bakersfield, CALafayette, LA

Charleston, SC

Killeen, TX

San Antonio, TX

Baton Rouge, LA

Raleigh, NC

Austin, TXFort Myers, FL

Oklahoma City, OK

Corpus Christi, TX

El Paso, TX

Des Moines, IA

Nashville, TN

Salt Lake City, UTRiverside, CA

Huntsville, ALPort St. Lucie, FL

Orlando, FL

Charlotte, NC

Seattle, WA

56%

55%

47%

46%

46% 41%

39%

39%

38%

36%

35%

35% 34%

34%

33%

32%

30%

29%

29% 28%

28% 27%

27%

26%

25%

Huntsville is one of

the Top 25 majormetros in the country for wage growth.

#7 in the South


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January 2016 UAH: Economic Impacts – Executive Summary page | 17COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

Economic Impactsof the Economic DevelopmentAnnouncements 2013-2015

An analysis of the economic development projects announced by theChamber of Commerce of Huntsville/Madison County for years 2013, 2014, and 2015

EXECUTIVE SUMMARY

Analysis performed by:

Center for Management & Economic Research,

College of Business Administration, University of Alabama in Huntsville

Dr. Brinda Mahalingam and Mr. Jeff Thompson

January 2016


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Executive Summary The Huntsville Metropolitan Statistical Area (MSA), one of the Metropolitan Statistical Areas (MSAs)

in United States, had a 2014 population of 441,086. It ranked as the 118th largest MSA in the U.S 1.

It is arguably the economic center of north Alabama with business activities easily extending be-

yond the county of Madison and the state of Alabama. Performing regular analysis of the economic

impacts of this community’s economic development announcement activities can provide insight

useful to the community, its leaders, and other interested stakeholders. The economic impact of aspecified geographic range, which includes the surrounding regions are compiled in this report.

The impact region for this study is defined as Madison County and the contiguous counties of

Jackson, Limestone, Marshall, Morgan, in Alabama and Lincoln County, Tennessee. The study also

analyses the impact on the major cities of Huntsville, Madison, Athens, and Decatur. Economic de-

velopment announcements by the Chamber of Commerce of Huntsville/Madison County for the

years 2013, 2014, and 2015 were used for the analysis.

Economic impact can be defined in various terms such as jobs, economic activity (output), payroll,

and tax generation among other measures. The impacts are typically shown through components

of direct and multiplier impacts over one or more years. Projects announced include sites in Madi-

son County inside and outside of the corporate limits of Huntsville City and Madison City as well as

the City of Huntsville in Limestone County.

The estimated economic impacts for the combination of economic development projects for 2013-

15 in the region include:

• $4.2 billion expansion of the region’s economy

• 15,200 operations-related jobs

• $989 million in additional annual payroll

• $1.46 billion impact from capital investments (building, equipment, etc.)

• 11,300 capital investment related jobs

• $567 million in capital investment-related payroll

• $128 million increase in net annual taxes generated (employment, state, local)• $52 million in net local taxes (sales, property and other taxes)

∏ $30 million in local sales taxes

∏ $21 million in local property taxes

∏ $1 million in other taxes

1 Data from U.S. Census

Economic Impacts of Economic Development Announcements 2013-2015


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The top twenty-five sectors most impacted by the 2013, 2014, and 2015 economic development project announcements are shown in Table 3 and Table 4. Economic output, and employment effects areshown for each sector. Economic output dollars represent the value of all the potential direct plus multiplier transactions in the industry sectors present in the specified region. Note that the estimated

economic impact value should be viewed as the size of the opportunity for the industries in the local region to provide products, services, and workforce to the new project(s).

The sector rankings may differ between tables due to the Output-per-Job differences by sector. Note there are additional sectors impacted beyond those listed here.

Table

3 Potential Economic Output Impacts for Top 25 Sectors

Economic Opportunity

Industry Sector Description 3 Year Total

Small arms ammunition manufacturing $719,068,455

Aircraft manufacturing $589,389,184

Construction of new manufacturing structures $563,624,118Construction of new commercial structures,including farm structures $454,414,899

Scientific research and development services $175,088,961

Wholesale trade $172,666,435

Motor vehicle gasoline engine and engineparts manufacturing $122,865,197

Owner-occupied dwellings $106,125,025

Architectural, engineering, and related services $75,076,408

Wired telecommunications carriers $70,836,318

Real estate $64,638,337

Business support services $56,854,514

Guided missile and space vehicle manufacturing $56,552,719



Breweries $48,531,077

Telephone apparatus manufacturing $41,191,145

All other industrial machinery manufacturing $37,068,091Retail - Motor vehicle and parts dealers $36,846,120

Broadcast and wireless communications equipmentmanufacturing $34,302,519

Search, detection, and navigation instruments manufacturing $32,709,956

Monetary authorities and depository credit intermediation $29,771,279

Offices of physicians $28,583,767

Other computer related services, including facilitiesmanagement $25,518,679

Truck transportation $23,371,468

Limited-service restaurants $22,158,509

Other local government enterprises $21,903,383

Impacts by Major Industry Sector


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Table

4Potential Employment Impacts for Top 25 Sectors



Construction of new manufacturing structures 7,325

Electroplating, anodizing, and coloring metal 2,025

All other transportation equipment manufacturing 1,702

Business support services 989

Construction of new commercial structures, including farm structures 959

Scientific research and development services 814

Wholesale trade 788

Aircraft manufacturing 595

Employment services 536

Architectural, engineering, and related services 500

Real estate 417

Limited-service restaurants 408

Full-service restaurants 408



Aircraft engine and engine parts manufacturing 300

Retail - Motor vehicle and parts dealers 289

Retail - General merchandise stores 243

Offices of physicians 207

Motor vehicle gasoline engine and engine parts manufacturing 190

Services to buildings 184

Other computer related services, including facilities management 178

Wired telecommunications carriers 161

Truck transportation 160

Retail - Food and beverage stores 150

Monetary authorities and depository credit intermediation 140

Guided missile and space vehicle manufacturing 135


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REGION Jobs Payroll Output Jobs Payroll Output Jobs Payroll Output Jobs Payroll OutputDirect 1,686 $142,925 $480,161 3,591 $346,159 $1,305,061 2,905 $193,725 $1,461,503 8,182 $682,809 $3,246,725

Multiplier 1,628 $73,841 $214,174 2,929 $130,554 $407,694 2,479 $105,206 $366,599 7,036 $309,601 $988,467

Total Ops Impact 3,314 $216,766 $694,335 6,520 $476,713 $1,712,755 5,384 $298,931 $1,828,102 15,218 $992,410 $4,235,192

Capital Investment 4,073 $206,796 $533,397 3,258 $161,731 $422,836 4,001 $198,595 $505,944 11,332 $567,122 $1,462,177

Sales Taxes $6,908 $13,879 $9,569 $30,356

Property Taxes $4,864 $9,812 $6,178 $20,854

Other Taxes $218 $444 $324 $986

Cumulative 2013-152013 2014 2015

*Shown in 2015 Constant Dollars

Economic Impacts of Announcements 2013-2015(Thousands except Jobs*)

Table

5

Economic Impacts of Economic Development Announcements 2013-2015

The economic impacts will be realized over the period of years required to complete the announced projects The impact estimates in this report are stated in 2015 constant dollars Tax


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Economic Development Impacts 2013-2015*

ANNUAL OPERATIONS (Recurring) CAPITAL INVESTMENTS (One time)

Jobs

Labor Income

($000)

Economic

Output ($000) Jobs

Labor Income

($000)

Economic

Output ($000)

Madison County 11,725 $787,900 $2,694,565 7,229 $357,291 $949,997

Limestone County 3,067 $186,172 $1,460,005 3,958 $203,336 $488,821

Morgan County 246 $10,987 $49,740 59 $2,354 $8,304

Marshall County 48 $2,087 $9,857 21 $1,545 $4,233

Jackson County 68 $2,776 $12,985 34 $1,439 $6,645

Lincoln County 64 $2,488 $8,040 31 $1,157 $4,177

Region Total 15,218 $992,410 $4,235,192 11,332 $567,122 $1,462,177

Huntsville City 9,766 $662,139 $3,074,418 8,592 $425,632 $1,092,159

Madison City 942 $42,329 $131,420 390 $18,874 $53,248

Athens City 300 $14,113 $50,540 211 $10,840 $20,669

Decatur City 118 $5,249 $23,763 28 $1,125 $3,967*Shown in 2015 Constant Dollars

Table

1

The economic impacts will be realized over the period of years required to complete the announced projects. The impact estimates in this report are stated in 2015 constant dollars. Tax

abatements have been used in the calculations to determine the net tax impacts. The cumulative impact estimates by county and major city are shown in Table 1.

Local taxes collected as a result of new and expanding industries are important

considerations in economic development. Recruiting projects is costly. Tax impacts

are important measures of the return on investment. Local taxes include sales tax -

es, property taxes, and other business taxes and fees. Table 2 shows the annualimpacts on local taxes for each year’s economic development announcements.

Annual Local Tax Impacts*

2013 Projects

($000)

2014 Projects

($000)

2015 Projects

($000)

TOTAL

($000)Sales Taxes $6,908 $13,879 $9,569 $30,356

Property Taxes $4,864 $9,812 $6,178 $20,854

Other Taxes $218 $444 $324 $986

Regional Total $11,990 $24,135 $16,071 $52,196

*In the year all projects are fully realized

Table

2


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The economic impacts on the North Alabama region from the economic development project announcements in 2013, 2014, and 2015 are tremendous. This economic development pro-

duction has created opportunities in the region for 15,200 new jobs, a $4.2 billion annual expansion of the regional economy, and $52 million in additional annual local taxes. These chartsshow estimated impacts for a ten-year period starting with the year project construction begins.

CumulativeImpacts of

Economic

Development

Announcement

2013-2015

Figure

1

*Shown in Current Dollars


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Impacts ofEconomic

Development

2015

Announcements

Figure

4


The impacts from 2015 announcements are depicted in the Figure 4 graphs. The total job creation from capital investment is about 4,000 jobs. The total operating jobs grow from about

2,460 jobs in 2016 to over 5,300 jobs in 2025. The total economic output due to capital investment in 2015 is approximately $506 million, and the total economic output impact rises from$840 million to $2 billion in 2025. The total impact of taxes ranges from $7 million in 2016 to more than $15 million by 2025.


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Impacts of

Economic

Development

2014

Announcements

Figure

3


The impacts for the announcements made in 2014 are shown in the Figure 3 graphs. The capital investment employment impacts total 3,258 capital investment jobs. The total job creation

increased to more than 6,500 jobs by 2023. The economic output impact in terms of capital investment was $423 million. Operations related economic output grows from about $580million in 2015 to approximately $1.9 billion over ten years. Total local tax impacts rose from roughly $8 million in 2015 to $24 million in ten year period.


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Impacts of

Economic

Development

2013

Announcements

Figure

2


The graphs for 2013 shown in Figure 2 depict the impact assessments for employment, output, labor income, and local tax for the announcements made in 2013. The employment impacts

of the announcements made in 2013 indicate an impact of 4,073 capital investment related jobs in 2014. The operations related jobs impact is estimated at 1,537 in 2014, and growing

to 3,314 by 2015, and would continue at this level over the 10-year period shown. The economic output impact for the announcements made in 2013 indicate a total impact of over $533

million from capital expenditures, and a total output impact from about $322 million in 2014 growing to about $787 million by 2023. The Labor income impact from the 2013 announce-

ments totals $100 million in 2014 growing to about $246 million by 2023. The impact on local taxes from the 2013 announcements is expected to be about $5.6 million in 2014, and grow

to about $12 million after 2015.


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Chamber of Commerce of Huntsville/Madison County

225 Church Street NW, Huntsville, AL 35801

256-535-2000 • hsvchamber.org

256-824-5326 • uahcmer.com

Researchers

Brinda Mahalingam, Ph.D., Economist

Jeff Thompson, Project Director

Karen Yarbrough, Editor

Questions regarding the analysis and report should be directed to:

Jeff Thompson, Project Director256.361.9065 | [email protected]

regional economic development brief

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