Survey: U.S. CFOs focus on domestic growth

If U.S. companies are going to grow in 2016, they’re going to do it domestically. That is the gist of a recent survey of chief financial officers conducted by the Deliotte professional services firm.

“CFOs indicate a push toward higher investment in North American markets with little additional focus on Europe or China,” the report stated.

The survey tallied responses from 112 CFOs. Fifty-five percent described North American conditions as good, compared to 59 percent in the previous quarter.

“Only 27 percent of surveyed CFOs said improvement in North America’s economy is dependent on improvement in China’s,” the report stated. “Moreover, nearly 60 percent said China is not an important market for their company.”

Despite concerns over the stock market, federal funds rate, foreign economies and presidential election, there are reasons for executives to see resilience in the U.S. economy. In a December speech in Columbia, Wells Fargo economist Jay Bryson pointed out sectors such as construction, education and health care.

“Could the rest of the world pull us down?” Bryson asked. “For all the talk of globalization, the U.S. economy doesn’t have a whole lot of ties to the rest of the world.”

Manufacturing is more exposed to globalization trends, however. In the Deloitte survey, manufacturing CFOs said they expected to do little domestic hiring in 2016 and 89 percent said they were focused on becoming more efficient.

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South Carolina brings home foreign investment trophy

When it comes to foreign direct investment, South Carolina has been declared the national champ.


South Carolina attracts the highest number of foreign expansion projects and interstate investments on a per capita basis, according to the news service fDi Intelligence.

Indiana finished second, North Carolina third and California fourth in the inaugural championship rankings. Data was collected by fDi between September 2014 and August 2015.

Expansions by Techtronic Industries in Anderson County and ZF Friedrichshafen in Laurens County, which combined for more than $100 million in capital investment and more than 750 announced new jobs, were mentioned specifically by fDi.

International commerce has long played a prominent role in South Carolina. In calendar 2015, 56 percent of announced capital investment and 37 percent of announced new jobs were tied to companies headquartered in foreign countries, according to the S.C. Department of Commerce.

The state also set a record in 2015 for total export sales for the sixth straight year, with $30.9 billion in sales. Commerce reported that the Palmetto State’s sales increased by 4.2 percent in 2015, fifth-best in the nation. Increases in sales of aircraft helped to pace the growth.

South Carolina led the nation with $9.8 billion in export sales of completed passenger motor vehicles. The state also leads in exports of tires, ball and roller bearings, and lawn mowers, according to Commerce.

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Tech economy remains a focus

Technology is on the minds of job creators in 2016.


“U.S. CEOs continue to invest in technology as the most direct path to meaningful innovation and operational efficiency,” professional services firm PricewaterhouseCoopers writes in its annual survey of chief executives.

There are concerns, too. The rapid pace of technological change is something 78 percent of U.S. CEOs are either somewhat or extremely concerned about. Cyber threats are a somewhat or extreme concern of 88 percent of respondents.

Tech is also reflective in the 65 percent of U.S. CEOs who are changing their leadership development efforts.

“The next generation of business leaders will have to be comfortable with many new technologies,” PwC wrote.

In South Carolina, efforts are being made to cultivate the next generation of tech-minded executives and entrepreneurs. A 2015 report by The Pew Charitable Trusts highlights Charleston among several smaller U.S. cities.

“Cities and states across the country are trying to promote entrepreneurship, especially in technology,” reads the report. “With dreams of becoming the next Silicon Valley — or at least something like it — they are providing money and expertise to startups and clustering tech companies in millennial-friendly neighborhoods.”

The article mentions several Lowcountry organizations, including the Interdisciplinary Center for Applied Technology program at the College of Charleston, which was founded through assistance from the S.C. Department of Commerce.

Recently, the Milken Institute pointed out that the high-tech sector in the Charleston-North Charleston metro area has grown 16 percent faster than the national average over the past five years.

Inc. magazine echoes the Pew report with an article that says small towns can attract and retain Silicon-Valley-level talent through proximity to research universities, reasonable real estate prices and “livability.”


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Strong demand for industrial sites continues across S.C., U.S.

Industrial real estate remains at a premium here and across the United States.


A recent report from Colliers International found nationwide industrial vacancy at 6.6 percent, down from 11.2 percent in early 2010. Rates have fallen for 22 consecutive quarters.

“The industrial sector is posting record absorption and rental rate increases despite mixed macro-economic signals,” the report concluded.

In a 2015 Area Development magazine survey, corporate executives said site availability was their third biggest economic development concern, behind construction costs and highway access.

“Given the massive spike in distribution to support same-day deliveries and omni-channel retail strategies, land sites in most major metros have been gobbled up by industrial developers in the past five years,” wrote Area Development.

The response?

“To provide a high-quality inventory of attractive sites for building, many states are investing to certify sites that are shovel-ready,” the magazine continues. “This key documentation allows timely project evaluation, which helps companies make informed property-acquisition decisions under short deadlines.”

In the Colliers report, Savannah, Georgia, was the top performer in terms of cutting its vacancy rate, which was down to 2.3 percent. Rates were highest in Boston (18.0 percent).

In Charleston, Colliers reports the year-end industrial vacancy rate was 6.5 percent, compared to 9.1 percent one year ago. In Columbia, it speculates that two large industrial vacancies totaling more than 1 million square feet could actually help economic development marketing efforts.

Colliers also reports that highway access in the Upstate plays into the needs expressed by executives in the Area Development magazine survey.

Looking ahead, the CBRE real estate firm sees a demand for new industrial development in the Columbia market. It also expects the Volvo plant to draw industrial development north up Interstate 26 from Charleston. In Greenville/Spartanburg, it foresees at least two more years of heavy development activity.

NAI Avant reports that in the Midlands, demand for warehouse space is leading to declining vacancy rates.

“Looking into 2016 we will continue to see intense demand, in particular, for quality space,” it writes.


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Report: S.C. city among top performers for job creation

The Charleston-North Charleston metro area is among the top U.S. cities when it comes to job creation and economic development, according to an annual ranking.


The 2015 Milken Institute Best Performing Cities Index ranks Charleston No. 17 among large U.S. metros. It gained 22 spots from 2014.

“Strong job and high-tech growth contributed to this rise,” the report stated. “Wages rose 5 percent faster than the national average between 2008 and 2013. Although the metro’s high-tech sector is still relatively small, it grew 16 percent faster than the national average over the past five years, ranking 12th in this measure.”

San Jose-Sunnyvale-Santa Clara, California, was No. 1. The index looks at growth in jobs, wages/salaries and technology.

“In most years, these give a good indication of the underlying structural performance of regional economics,” the report states.

Charleston has had several good showings on the index in recent years, including an 11th-place ranking in 2011 and a ninth-place outcome in 2012.

There were 200 large metros in the index. Others of local note included:

  • Charlotte
  • Greenville-Anderson-Mauldin
  • Spartanburg
  • Columbia
  • Myrtle Beach-Conway-North Myrtle Beach
  • Augusta

The institute also ranked 201 small cities. Local communities on that list included:

  • Sumter
  • Hilton Head Island-Bluffton-Beaufort
  • Florence

Hilton Head ranked 17th among small cities in the category of short-term job growth.

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Local kudos: praise for S.C. tourism industry hot spots

The tourism industry is a strong economic driver in South Carolina, and Beaufort recently made The New York Times list of “52 Places to Go in 2016.”


“Petite Beaufort has the appeal of a much larger city (restaurants, festivals and art galleries) without giving up its small-town, Low Country charms (bike lanes, walking paths and romantic park benches overlooking the water),” the Times wrote.

Charleston continues to be popular. The Holy City was voted Best Small City in the U.S. as part of Conde Nast Traveler magazine’s Readers’ Choice Awards 2015.

“Charleston remains one of the country’s most picturesque cities,” said the magazine, which lauded the city’s dining and theater scenes.

The vote covered cities with populations under 150,000. Savannah was No. 5 and Asheville came in at No. 9.Last year, Conde Nast Traveler readers voted Charleston the No. 2 city in the world.

Not only is Charleston a popular place to visit, both it and Columbia are drawing notice from house hunters.

Real estate website Trulia ranks Charleston No. 3 and Columbia seventh among its housing markets to watch in 2016.

“These markets exhibit strength in five key metrics: strong job growth over the past year, low vacancy rates, high affordability, more inbound home searches than outbound, and a large share of millennials,” the site announced in a blog post.

And when it comes to managing things like a mortgage, Greenville is tops in South Carolina, according to a personal finance website. SmartAsset rated Greenville No. 75 overall out of approximately 200 U.S. cities in its “debt savvy” index, which looks at average debt, foreclosure rates, credit scores and credit utilization.

Cities in the Upper Midwest dominated the top spots, with Mankato, Minnesota, No. 1 overall.

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Experts debate future of jobs, training

Is innovation creating an automated economy in which many citizens are paid a monthly stipend to not work, or is technological advancement leading to new types of jobs we haven’t even thought of yet?

Pointing at spreadsheet

Business partners discussing spreadsheets on glass table in office

When it comes to job creation and economic development, those are some of the scenarios being considered.

“I think that the areas that are the most promising in creating jobs are in areas that we already see, healthcare for example,” said author Martin Ford, who was in Columbia recently for the Economic Outlook Conference at the University of South Carolina. “Those jobs are much harder to automate than manufacturing.”

Ford’s book, “Rise of the Robots,” talks about the increased use of algorithms and automation to perform tasks that were previously done by workers, from manufacturing to stock trading.

There is also the increasing globalization of the workforce.

“It’s no good training kids to do here what they can do in India,” said Dr. Peter Brews, dean of the Darla Moore School of Business at USC.

Several speakers recommended a continuing focus on job training, particularly in STEM fields.

“I’m not worried about whether we will have jobs for people,” Brews said. “I’m much more worried about whether there will be people for the jobs.”

Richard Kaglic, a staff economist with the Federal Reserve Bank of Richmond, pointed out the correlation between educational attainment and societal success.

“The more you invest in your own human capital, the more flexible you’re going to be,” he said.

But even Ford, who worries that innovation could outpace workforce training initiatives, doesn’t see manufacturing disappearing from the U.S. economy.

“It’s good to have manufacturing,” he said. “It’s good for the country to have that innovation and expertise here.”

Where do you think the future of jobs and training is headed?

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