400 jobs promised in York County agreement. Will 2023 be boom or bust for local economy?
New jobs and corporate investment aren’t always a straight-line economic indicator, and a new agreement percolating in York County may be proof.
York County on Tuesday night pressed forward with a fee agreement that could help bring a development with more than 400 jobs. The council only needs one more vote to finalize the agreement, which would involve more than $440 million in investment. Both those figures would exceed, by one count, what all of York, Lancaster and Chester county saw in project announcements during 2022.
But the agreement’s implications for the whole of 2023 remain unclear. Any year could see some large projects, said Christopher Finn, interim president and CEO of the I-77 Alliance.
The nonprofit I-77 Alliance covers five counties between Charlotte and Columbia, including York, Chester and Lancaster. The group lists data back to 2014 from large new job and corporate investment announcements that go through the state commerce department. The list doesn’t include all new business projects, but captures most of the largest ones among them.
Last year, the tri-county area saw six announcements. Two, Element Designs in Fort Mill and Chief Buildings in Lancaster, are new additions. The other four announcements were expansions for existing companies within the three counties.
For comparison, six of nine announcements from 2021 involve companies new to the tri-county area. In 2020, eight of the 14 announcements were new additions.
The six announcements last year tied the lowest number since posted I-77 Alliance data began in 2014. The total job (362) and investment ($133.2 million) figures for 2022 are the lowest for any year on that record.
Massive projects
One reason year-to-year comparisons don’t always show trends in large business relocation or expansion is the sheer size of projects. A single project in any given year often dwarfs all others.
Figures were down 69% for jobs and 74% for total investment last year compared to 2021. Yet, most of the 2021 totals came from one announcement, the E&J Gallo Winery in Chester County. At 496 jobs and $423 million of investment, it’s on par with the project under consideration now in York County.
“Without the Gallo project we had a stronger year in 2022 from a (capital expenditure) perspective and nearly similar job creation,” Finn said.
In 2020, there were almost 1,800 new jobs pledged with 14 announcements in the tri-county. More than two-thirds came from Ross Stores (700 jobs) and the failed Carolina Panthers headquarters project in Rock Hill (500 jobs). The $500 million projected investment for the Panthers project was more than two-thirds of the entire region total and five times larger than any other announcement.
In all, there have been seven announcements of 1,000 or more jobs since 2014. The three largest came on the same day in 2014. The opening of Kingsley in Fort Mill brought LPL Financial (3,000 jobs) and Lash Group (2,400). Chester County also announced Giti Tire (1,700).
What to focus on
The point for economic development teams isn’t to compete with 2014 or have line graphs pointing up as the calendar moves. It’s about total jobs and economic investment.
“This is really the point to focus on, not the number of announcements, but those other variables,” Finn said.
Variability year-to-year doesn’t mean deals happen by chance. County, regional and state economic development teams regularly pursue new leads.
“We expect to see an increase in our travel calendar this year domestically to meet with targeted prospects,” Finn said. “This also includes us sending the county directors on mission trips as well.”
Past projects also can help leverage new ones.
“So when EJ Gallo is at full operation, we’ll use that as a hook to get interest from other companies,” Finn said.
There’s more opportunity to meet with target companies due to the increase in virtual meetings since 2020, Finn said. Yet meetings now may not go public this year, as Finn said companies typically run 12- to 18-month growth plans.
2023 investment
Time is another difficulty in forecasting new business. It can be months or years of site prep and study before a company commits to a move or major expansion. So announcements today may reflect conditions a year or two ago rather than the economic outlook of the moment.
In 2021, eight of nine tri-county announcements came in the first half of the year. Meaning, Finn said, that significant work to make them happen came prior to the calendar change. They were continuations from a strong 2020.
“I would also surmise the timing and length of the projects is a factor,” Finn said.
That brings another reminder how difficult predictions can be. The year 2020 was expected to be terrible economically because of the pandemic, he said, but it was as strong as any other.
New job commitments roughly quadrupled from 2019 to 2020. Investment grew by more than $400 million. Both figures were the sharpest year-to-year increases on record.
Just as major announcements came amid pandemic shutdowns, Finn expects there will be others even during times of recession.
“Many companies we speak with are in recession proof sectors so while the economy may dip and dive, they are still actively expanding,” Finn said.
