Sunday, April 15, 2012

Manufacturing is Booming in Alabama; 313 Companies Expanding, 70 New Ones are Coming

NEW YORK (CNNMoney) -- "As manufacturing picks up across the United States, Alabama has become an unexpected beneficiary. The state -- best known for agriculture and textiles production -- is enjoying the best pickup in industrial manufacturing in five years as U.S. and foreign companies flock there.  The credit goes to the state's low taxes, top-grade trade schools, a statute that curbs union power, and other incentives spurring many manufacturers to move to or expand in the state, experts said. 

In 2011, 70 domestic manufacturers announced plans to set up a factory in Alabama. They're expected to create 4,879 jobs and $1.6 billion in capital investment over the next two to three years. In the same year, an additional 313 manufacturers, already in the state, announced expansion plans that would create another 12,369 new jobs and pour $2.5 billion in capital investment."


10 Comments:

At 4/15/2012 2:14 PM, Blogger Ray Medeiros, Jr. said...

I disagree with "why" manufacturing is booming. Back in 2007 CATO published an article saying China's effective tax rate was higher than the US

http://www.cato.org/publications/commentary/global-race-lower-corporate-tax-rates

I believe the cost of fuel, perhaps tax payer subsidies etc. has brought manufacturing to Alabama

 
At 4/15/2012 3:05 PM, Blogger juandos said...

"I believe the cost of fuel, perhaps tax payer subsidies etc. has brought manufacturing to Alabama"...

Well ray could it also be possible that there is a distinct lack of unions driving the wage rate have something to do with Alabama being an attractive state to put a manufacturing plant in?

 
At 4/15/2012 6:48 PM, Blogger Buddy R Pacifico said...

Roll, Tide, Roll.

Build, baby, build.

 
At 4/16/2012 7:50 AM, Blogger Jet Beagle said...

Ray: "Back in 2007 CATO published an article saying China's effective tax rate was higher than the US"

Can you explain this comment? Are you saying that tax rates cannot be a factor in Alabama's manufacturing boom because China boomed with a high tax rate?

China had two advantages which probably outweighed tax differences in 2007: very low cost labor and lax environmental enforcement.

 
At 4/16/2012 7:55 AM, Blogger Jet Beagle said...

Ray,

Do you believe that right-to-work laws are not a factor when companies make plant location decisions?

 
At 4/16/2012 8:25 AM, Blogger Hydra said...

Do you believe that right-to-work laws are not a factor when companies make plant location decisions?



Sure, but there are lots of other factors, and workers make decisisons about where to live, just as employers make decisions about where to operate.




"Numerous institutions produce rankings of state business climates. The rankings rarely agree on what is important to a business climate or where various states rank. This study examines the most prominent business climate indexes for their consistency over time, their consistency with one another, and their ability to explain relative state economic growth. We make use of a novel approach—examining whether differences in state business climate can explain relative growth of counties at state borders. Results indicate that any individual business climate index can explain at most 5% of the variation in border county relative economic growth, but that they can explain up to 13.6% of the variation as a group. Some indexes consistently can explain relative growth while others are uncorrelated or even negatively correlated with growth. Among the indexes we rate as reliable, Kansas ranks highly on some and poorly on others."


http://www.kansasinc.org/pubs/working/Business%20Climate%20Indexes.pdf

 
At 4/16/2012 8:38 AM, Blogger Hydra said...

Alabama Ranks 48th Among the 50 States In Quality of Life for Children
August 26, 2011

"Alabama again ranked near the bottom in the annual Kids Count survey by The Annie E. Casey Foundation, which measures quality of life issues like health care, education, and poverty. Last year, Alabama ranked 47th; this year, it ranked 48th."


http://www.eji.org/eji/node/553



For what it is worth, Housing affordability is high in Alabama.

 
At 4/16/2012 11:02 AM, Blogger Jet Beagle said...

hydra,

I do not disagree. Factors other than right-to-work laws influence plant location decisions. But there is little dispute about the presence or absence of such laws throughout an entire state.

On the other hand, the quality of life factors you mentioned - quality of education, health care, and level of poverty - vary considerably from one community to another within an individual state. Furthermore, the degree to which such factors vary - driven by the decisions about how to measure those factors - is subjective.

 
At 4/16/2012 11:42 PM, Blogger Hydra said...

When i lived in the South I found that the pay was lower, the cost of living was lower.

But the standard of living was much lower. Much of social life consisted of listening to rednecks complain about the blacks, or being invited to attend someones church.

Opportunity was lower.

But, that was many years ago, at the beginning of my career.

I am sure there are nice communities, (epecially the gated ones, aargh), but someone would have to offer me a lot of money to go back.

 
At 4/20/2012 5:41 PM, Blogger james said...

At least theirs some place in the USA where Manufacturing has a bright future.

 

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