SC Ranks #3 in Top States for Doing Business 2014
September 12, 2014
Sparking growth in business investment and jobs has proven more difficult than expected for states as they have emerged from the Great Recession. Capital spending and, especially, job creation have remained below par as corporate chiefs and business owners stick with a conservative philosophy until they perceive signs of a true boom. So the fight for the attention of site consultants and CFOs is more pitched than ever.
With that in mind, Area Development is publishing our fifth annual Top States for Doing Business survey of site consultants, ranking the states based on their number of mentions by the consultants in three overall categories and 18 subcategories:
Business Environment: overall cost of doing business, incentive programs, corporate tax environment, cooperative state government, access to capital and project funding, speed of permitting, most favorable regulatory environment
Labor Climate: availability of skilled labor, competitive labor costs, labor climate for right-to-work states, labor climate for non-right-to-work states, leading workforce-development programs
Infrastructure and Global Access: distribution and supply-chain hubs, rail and highway access, certified sites/shovel-ready programs, competitive utility rates, energy reliability and smart-grid deployment, water outlook, including availability and cost
Three major features of the list pop up. First, it continues to be dominated by states in the South and mid-South that have managed to extend the momentum in landing business development that they have enjoyed for some time (mostly, these states just switched positions within the top 10).
Second — and probably more intriguing because it is a new development — the list includes two states from the industrial Midwest. The presence of Indiana and Ohio on the 2014 list indicates that these states in particular, and the upper Midwest in general, are scratching their way back into position as major players in the U.S. economic-development derby.
And third, the state of California finally proved unable, in the new list, to hang on to its 10th place ranking in the 2013 survey. The state’s reputation with site consultants keeps taking hits — witness Toyota’s announcement earlier this year that it plans to move its corporate headquarters and 4,000 jobs to suburban Dallas from southern California. And so this year, California placed in the top states in only three of the 18 sub-categories, notably ranking third for access to capital and project funding, no doubt a legacy of the continued success of Silicon Valley.
The following profiles of each of the top 10 states provide insight into why each state is among the surveyed consultants’ top choices for new and expanded facilities.
3. South Carolina
The Palmetto State long has been held in high regard by the economic development community, but South Carolina picked up two huge new testimonials this year from a couple of the biggest names in global manufacturing. BMW and Boeing each announced crucial new and expanded roles for their South Carolina operations.
The companies could cite South Carolina advantages such as its low overall cost of doing business (site consultants ranked the state No. 1 in this regard). The state was also given especially high marks for its incentive programs, cooperative state government, and certified sites/shovel-readiness in the Area Development survey. Site consultants ranked South Carolina No. 2 for all three of the aforementioned factors.
Probably the most consistent advantage of South Carolina is the quality of its workforce. South Carolina is a right-to-work state with a low unionization rate of 3.3 percent overall, and — at 1.3 percent — the lowest unionization rate in the United States for the private sector.
The state’s ReadySC workforce-training system includes recruiting, screening, training, and other aspects of workforce preparation. ReadySC, for example, committed to help Boeing hire 3,600 people over the next several years. And that was even before Boeing committed to producing the new stretch version of the Dreamliner at its plant in North Charleston, S.C., which will become the first Boeing jetliner model to be built solely in a nonunion factory.
Meanwhile, BMW said it would expand its plant in Spartanburg County with a $1 billion investment that will create 800 new jobs and make the facility the biggest exporter of autos anywhere in the United States.