Move over Asia, US South looks like a tiger too
Foreign firms have helped put the Southeast on the map, and now its economy is booming
FASTER than kudzu, new homes and foreign companies are covering the landscape of the Southeast in an economic bloom that's the envy of the nation.
``The Southeast itself has the fourth-largest [industrialized] economy in the world, behind the United States, Japan, and Germany,'' says Mark Vitner, vice president at First Union National Bank in Charlotte, N.C. ``During the 1990s, it's growing faster than any other large industrialized nation. That's a pretty dynamic economy.''
Mr. Vitner defines the Southeast more broadly than the US Census Bureau. He includes the South Atlantic states, which run from Delaware to Florida, and the East South Central region, which includes Alabama, Louisiana, Mississippi, Kentucky, and Tennessee. ``It's a pretty broad region, but in fact, you don't have to include all those states'' to get a combined economy rivaling the biggest in the world, he says. ``Most of the growth has been concentrated in Florida, Georgia, the Carolinas, and Tennessee.''
However one defines it, foreign and US executives are taking notice of the Southeast. In its Nov. 14 issue, Fortune magazine ranks Atlanta the fourth-best city in the world to do business in, after Hong Kong, New York, and London. The rating is based on a survey of 500 executives in 32 countries, who were asked about business costs, cultural acceptance, barriers to entry, and market-growth potential.
A spot-check of the economic growth in Southern cities shows why the region earns a prominent place on most business executives' maps.
* In Atlanta, the ``capital'' of the New South (a term used in the region to describe the economic, political, and cultural resurgence of recent years), businesses in the metro area have added 88,000 jobs over the past year, one of the strongest gains in the US. The city's job-growth rate is just over 5 percent, compared with a little more than 2 percent for the US as a whole and about 3 1/2 percent for the Southeast, according to the Federal Reserve Bank of Atlanta. Construction-related manufacturing employment is surging, due in large part to preparations for the 1996 Olympics, which the city is hosting.
* A strong job market and lower cost of living are turning Charlotte, N.C., into one of the South's newest breakthrough cities, Vitner says. Charlotte's population grew nearly 20 percent during the 1980s, and thousands of people continue to move there each year. The city, home to two of the South's largest banking companies, NationsBank and First Union, has become a financial hub and is ``adding scores of new businesses from around the world,'' Vitner says. Last year, Charlotte captured attention when it was selected as a host city for a new team in the National Football League.
* Florida is doing well, but Orlando is outpacing the other Sunshine State cities. It has added 33,000 jobs in the past 12 months, representing a 5 percent job-growth rate, says John Godfrey, senior vice president and chief economist at Barnett Banks Inc. in Jacksonville. A robust tourist economy, as well as strength in manufacturing and construction, is driving the city's prosperity. ``All the indicators for Orlando are very solid,'' Mr.
Godfrey says. ``This is heady growth.''
``There are parts of the nation - the Mountain States (from Arizona to Wyoming) - that are growing faster,'' Vitner says, ``but those states don't have large numbers of people, so the growth rates look much faster.''
A number of factors account for why the Southeast's economy is doing so well, says Jeffrey Humphreys, director of economic forecasting at the University of Georgia in Athens. A relatively low-cost structure helps attract new companies and foreign investment; the industrial base is consumption-oriented rather than defense-oriented; the residential and nonresidential construction sector is more robust than other parts of the country; corporate downsizing and restructuring has not been extensive, while the service sector is growing rapidly, Dr. Humphreys says.
``We're fairly diversified,'' he says. ``The forces that are driving growth in the South are not a short-term phenomenon. I expect the Mountain States and the South Atlantic region to be the growth leaders for some time to come.''
The South Atlantic region is leading the nation in foreign-direct investment, Humphreys says. And of those states, Georgia is leading the pact, according to a recent study by the Atlanta office of KPMG Peat Marwick, an international accounting and consulting firm. In 1993, foreign companies invested $10 billion in the state, compared with $5.2 billion in Florida, the region's second-largest benefactor of foreign investment dollars.
``About one-quarter of the country is the South and Southeast,'' says Jeffrey Rosensweig, an economics professor at Emory University Business School in Atlanta. ``In a political sense, we have more and more influence; and in the business sense, I think most people think if we can continue to get our act together, we'll be a little bit like an Asia.''
``The South is quite competitive,'' Professor Rosensweig adds. ``It's not clear who will be the leading city ... 20 years from now. Atlanta has a great head start, but Charlotte, Birmingham, [Ala.], Nashville - there's tremendous momentum in those places as well.''