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May 2016 Huntsville Regional Economic Growth Initiative page | 1CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
REGIONALECONOMIC DEVELOPMENT
BRIEFCHAM BE R O F CO M M E RCE O F HUN T S V ILLE /M ADIS O N CO UN T Y
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May 2016 Huntsville Regional Economic Growth Initiative CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY page | 2
Table of Contents
Huntsville Regional Economic Growth Initiative . . . . . . . . . 3
2016 State of the Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
UAH Economic Impact Study. . . . . . . . . . . . . . . . . . . . . . . . 17
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May 2016 Huntsville Regional Economic Growth Initiative CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY page | 4
HREGI Investors as of May 6, 2016
DEVELOPMENT COUNCIL
CHAIRMAN’S COUNCIL
ADTRAN, Inc. | The Boeing Company | City of Madison | Emerson Network Power - Avocent
Redstone Federal Credit Union | Remington Outdoor Company
LEADERSHIP FORUM
DEVELOPMENT PARTNER
PRESIDENT’S CIRCLE
Huntsville Hospital | Regions BankMadison County Commission
REGIONAL PARTNERS
Port of Huntsville | Tennessee Valley Authority
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May 2016 State of the Economy page | 6RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
2016 STATE OF THE ECO NOMY
M E A S U R I N G E C O N O M I C P E R F O R M A N C E
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May 2016 State of the Economy page | 7RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Population Density
10,173 - 14,511 7,487 - 10,172 5,147 - 7,486 3,250 - 5,146 592 - 3,249
Redstone Arsenal
HuntsvilleMadison
Athens
M A D I S O N C O U N T Y
L I M E S T
O N E C O U N T Y
2015 Total Population (Esri) by Census Tracts
More than 9,000 new jobs over the past 3 years
5-year projection: 8.5% growth; 38,000 new residents
Expected to grow beyond 500,000 people by 2023
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May 2016 State of the Economy page | 8RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Population Growth Trends
Population Growth 2010-2015 | Southeast Metros
Huntsville is one of the Top 40 fastest growing major metros in the country.
Myrtle Beach, SC
Fort Myers, FL
Orlando, FL
Charleston, SCFayetteville, AR
Sarasota, FL
Nashville, TN
Lakeland, FL
Atlanta, GA
Miami, FL
Jacksonville, FL
Port St. Lucie, FL
Tampa, FL
Huntsville, AL
Pensacola, FL
Greenville, SC
Lexington, KYNew Orleans, LA
Daytona Beach, FL
Columbia, SC
14.1%
13.1%
11.6%
11.5% 10.3%
9.3%
9.2%
7.8%
7.7%
7.6%
7.4%
7.0%
6.7%
6.1%
6.0%
5.9%
5.7% 5.6%
5.5%
5.2%
#14 in the South
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May 2016 State of the Economy page | 9RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Population Growth Trends
Population Growth 2010-2015
Huntsville accounted for 34% of Alabama’s growth.
Alabama 79,243
Huntsville 27,159
Remainder
of Alabama (65 counties)
66%
Huntsville (2 counties)
34%
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May 2016 State of the Economy page | 10RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Bureau of Economic Analysis Metrics
Gross Domestic Product Growth 2001-2014
The Huntsville economy continued to grow during the recession.
60%
50%
40%
30%
20%
10%
0%
Huntsville 54%
$7.7 billionmore per year
(25% of Alabama’stotal growth)
United States
Alabama
24%21%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
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May 2016 State of the Economy page | 11RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Bureau of Economic Analysis Metrics
Gross Domestic Product Growth 2001-2014 | U.S. Metros
Huntsville GDP growth is among the Top 10 major metros in the country.
Austin, TX
Portland, OR
Fayetteville, AR
Provo, UT
San Jose, CA
Durham, NC
Bakersfield, CA
McAllen, TX
Huntsville, AL
Dallas, TX
Raleigh, NCCorpus Christi, TX
Charleston, SC
San Antonio, TX
Houson, TX
Des Moines, IA
Nashville, TNKilleen, TX
Baton Rouge, LA
Charlotte, NC
78%
76%
74%
71%
64%
59%
57%
57%
54%
52%
50% 49%
46%
46%
45%
44%
43% 42%
42%
40%
#2 in the South
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May 2016 State of the Economy page | 12RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
20%
15%
10%
5%
0%
-5%2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bureau of Labor Statistics Metrics
Employment Growth 2001-2015
Huntsville 18%
United States
Alabama
7%
2%
Huntsville added more than 33,700 new net jobs (88% of total Alabama growth).
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May 2016 State of the Economy page | 13RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Bureau of Labor Statistics Metrics
Employment Growth 2001-2015
Fort Myers, FL
Fayetteville, AR
Port St. Lucie, FL
Charleston, SC
Orlando, FL
Nashville, TN
Myrtle Beach, SC
Sarasota, FL
Baton Rouge, LA
Huntsville, AL Jacksonville, FL
Daytona Beach, FL
Lakeland, FL
Miami, FL
Knoxville, TN
Columbia, SC
Atlanta, GA
Lafayette, LA
Lexington, KY
Tampa, FL
40%
38%
30%
29%
28%
25%
24%
21%
20%
18% 15%
15%
15%
14%
14%
13%
12%
11%
10%
10%
Huntsville is one of the Top 10 major metros in the South for employment growth.
#10 in the South
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May 2016 State of the Economy page | 14RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Bureau of Labor Statistics Metrics
Employment Growth 2001-2015
Alabama
33,742Huntsville
38,258
Huntsville’s employment growth was 88% of the Alabama total.
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May 2016 State of the Economy page | 15RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Bureau of Economic Analysis Metrics
Wage & Salary Growth 2001-2014 (adjusted for inflation)
30%
25%
20%
15%
10%
5%
0%
-5%2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Huntsville 28%$1.9 billion
more per year
United States
Alabama
13% 9%
Huntsville wage growth was not affected by the recession, but by sequestration.
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May 2016 State of the Economy page | 16RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Bureau of Economic Analysis Metrics
Wage & Salary Growth 2001-2014 (adjusted for inflation)
Fayetteville, AR
McAllen, TX
Houston, TX
Provo, UT
Bakersfield, CALafayette, LA
Charleston, SC
Killeen, TX
San Antonio, TX
Baton Rouge, LA
Raleigh, NC
Austin, TXFort Myers, FL
Oklahoma City, OK
Corpus Christi, TX
El Paso, TX
Des Moines, IA
Nashville, TN
Salt Lake City, UTRiverside, CA
Huntsville, ALPort St. Lucie, FL
Orlando, FL
Charlotte, NC
Seattle, WA
56%
55%
47%
46%
46% 41%
39%
39%
38%
36%
35%
35% 34%
34%
33%
32%
30%
29%
29% 28%
28% 27%
27%
26%
25%
Huntsville is one of
the Top 25 majormetros in the country for wage growth.
#7 in the South
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January 2016 UAH: Economic Impacts – Executive Summary page | 17COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Economic Impactsof the Economic DevelopmentAnnouncements 2013-2015
An analysis of the economic development projects announced by theChamber of Commerce of Huntsville/Madison County for years 2013, 2014, and 2015
EXECUTIVE SUMMARY
Analysis performed by:
Center for Management & Economic Research,
College of Business Administration, University of Alabama in Huntsville
Dr. Brinda Mahalingam and Mr. Jeff Thompson
January 2016
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January 2016 UAH: Economic Impacts – Executive Summary page | 19COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Executive Summary The Huntsville Metropolitan Statistical Area (MSA), one of the Metropolitan Statistical Areas (MSAs)
in United States, had a 2014 population of 441,086. It ranked as the 118th largest MSA in the U.S 1.
It is arguably the economic center of north Alabama with business activities easily extending be-
yond the county of Madison and the state of Alabama. Performing regular analysis of the economic
impacts of this community’s economic development announcement activities can provide insight
useful to the community, its leaders, and other interested stakeholders. The economic impact of aspecified geographic range, which includes the surrounding regions are compiled in this report.
The impact region for this study is defined as Madison County and the contiguous counties of
Jackson, Limestone, Marshall, Morgan, in Alabama and Lincoln County, Tennessee. The study also
analyses the impact on the major cities of Huntsville, Madison, Athens, and Decatur. Economic de-
velopment announcements by the Chamber of Commerce of Huntsville/Madison County for the
years 2013, 2014, and 2015 were used for the analysis.
Economic impact can be defined in various terms such as jobs, economic activity (output), payroll,
and tax generation among other measures. The impacts are typically shown through components
of direct and multiplier impacts over one or more years. Projects announced include sites in Madi-
son County inside and outside of the corporate limits of Huntsville City and Madison City as well as
the City of Huntsville in Limestone County.
The estimated economic impacts for the combination of economic development projects for 2013-
15 in the region include:
• $4.2 billion expansion of the region’s economy
• 15,200 operations-related jobs
• $989 million in additional annual payroll
• $1.46 billion impact from capital investments (building, equipment, etc.)
• 11,300 capital investment related jobs
• $567 million in capital investment-related payroll
• $128 million increase in net annual taxes generated (employment, state, local)• $52 million in net local taxes (sales, property and other taxes)
∏ $30 million in local sales taxes
∏ $21 million in local property taxes
∏ $1 million in other taxes
1 Data from U.S. Census
Economic Impacts of Economic Development Announcements 2013-2015
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January 2016 UAH: Economic Impacts – Executive Summary page | 20COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
The top twenty-five sectors most impacted by the 2013, 2014, and 2015 economic development project announcements are shown in Table 3 and Table 4. Economic output, and employment effects areshown for each sector. Economic output dollars represent the value of all the potential direct plus multiplier transactions in the industry sectors present in the specified region. Note that the estimated
economic impact value should be viewed as the size of the opportunity for the industries in the local region to provide products, services, and workforce to the new project(s).
The sector rankings may differ between tables due to the Output-per-Job differences by sector. Note there are additional sectors impacted beyond those listed here.
Table
3 Potential Economic Output Impacts for Top 25 Sectors
Economic Opportunity
Industry Sector Description 3 Year Total
Small arms ammunition manufacturing $719,068,455
Aircraft manufacturing $589,389,184
Construction of new manufacturing structures $563,624,118Construction of new commercial structures,including farm structures $454,414,899
Scientific research and development services $175,088,961
Wholesale trade $172,666,435
Motor vehicle gasoline engine and engineparts manufacturing $122,865,197
Owner-occupied dwellings $106,125,025
Architectural, engineering, and related services $75,076,408
Wired telecommunications carriers $70,836,318
Real estate $64,638,337
Business support services $56,854,514
Guided missile and space vehicle manufacturing $56,552,719
Economic Opportunity
Industry Sector Description 3 Year Total
Breweries $48,531,077
Telephone apparatus manufacturing $41,191,145
All other industrial machinery manufacturing $37,068,091Retail - Motor vehicle and parts dealers $36,846,120
Broadcast and wireless communications equipmentmanufacturing $34,302,519
Search, detection, and navigation instruments manufacturing $32,709,956
Monetary authorities and depository credit intermediation $29,771,279
Offices of physicians $28,583,767
Other computer related services, including facilitiesmanagement $25,518,679
Truck transportation $23,371,468
Limited-service restaurants $22,158,509
Other local government enterprises $21,903,383
Impacts by Major Industry Sector
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January 2016 UAH: Economic Impacts – Executive Summary page | 21COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Table
4Potential Employment Impacts for Top 25 Sectors
Economic Opportunity
Industry Sector Description 3 Year Total
Construction of new manufacturing structures 7,325
Electroplating, anodizing, and coloring metal 2,025
All other transportation equipment manufacturing 1,702
Business support services 989
Construction of new commercial structures, including farm structures 959
Scientific research and development services 814
Wholesale trade 788
Aircraft manufacturing 595
Employment services 536
Architectural, engineering, and related services 500
Real estate 417
Limited-service restaurants 408
Full-service restaurants 408
Economic Opportunity
Industry Sector Description 3 Year Total
Aircraft engine and engine parts manufacturing 300
Retail - Motor vehicle and parts dealers 289
Retail - General merchandise stores 243
Offices of physicians 207
Motor vehicle gasoline engine and engine parts manufacturing 190
Services to buildings 184
Other computer related services, including facilities management 178
Wired telecommunications carriers 161
Truck transportation 160
Retail - Food and beverage stores 150
Monetary authorities and depository credit intermediation 140
Guided missile and space vehicle manufacturing 135
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January 2016 UAH: Economic Impacts – Executive Summary page | 22COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
REGION Jobs Payroll Output Jobs Payroll Output Jobs Payroll Output Jobs Payroll OutputDirect 1,686 $142,925 $480,161 3,591 $346,159 $1,305,061 2,905 $193,725 $1,461,503 8,182 $682,809 $3,246,725
Multiplier 1,628 $73,841 $214,174 2,929 $130,554 $407,694 2,479 $105,206 $366,599 7,036 $309,601 $988,467
Total Ops Impact 3,314 $216,766 $694,335 6,520 $476,713 $1,712,755 5,384 $298,931 $1,828,102 15,218 $992,410 $4,235,192
Capital Investment 4,073 $206,796 $533,397 3,258 $161,731 $422,836 4,001 $198,595 $505,944 11,332 $567,122 $1,462,177
Sales Taxes $6,908 $13,879 $9,569 $30,356
Property Taxes $4,864 $9,812 $6,178 $20,854
Other Taxes $218 $444 $324 $986
Cumulative 2013-152013 2014 2015
*Shown in 2015 Constant Dollars
Economic Impacts of Announcements 2013-2015(Thousands except Jobs*)
Table
5
Economic Impacts of Economic Development Announcements 2013-2015
The economic impacts will be realized over the period of years required to complete the announced projects The impact estimates in this report are stated in 2015 constant dollars Tax
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January 2016 UAH: Economic Impacts – Executive Summary page | 23COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Economic Development Impacts 2013-2015*
ANNUAL OPERATIONS (Recurring) CAPITAL INVESTMENTS (One time)
Jobs
Labor Income
($000)
Economic
Output ($000) Jobs
Labor Income
($000)
Economic
Output ($000)
Madison County 11,725 $787,900 $2,694,565 7,229 $357,291 $949,997
Limestone County 3,067 $186,172 $1,460,005 3,958 $203,336 $488,821
Morgan County 246 $10,987 $49,740 59 $2,354 $8,304
Marshall County 48 $2,087 $9,857 21 $1,545 $4,233
Jackson County 68 $2,776 $12,985 34 $1,439 $6,645
Lincoln County 64 $2,488 $8,040 31 $1,157 $4,177
Region Total 15,218 $992,410 $4,235,192 11,332 $567,122 $1,462,177
Huntsville City 9,766 $662,139 $3,074,418 8,592 $425,632 $1,092,159
Madison City 942 $42,329 $131,420 390 $18,874 $53,248
Athens City 300 $14,113 $50,540 211 $10,840 $20,669
Decatur City 118 $5,249 $23,763 28 $1,125 $3,967*Shown in 2015 Constant Dollars
Table
1
The economic impacts will be realized over the period of years required to complete the announced projects. The impact estimates in this report are stated in 2015 constant dollars. Tax
abatements have been used in the calculations to determine the net tax impacts. The cumulative impact estimates by county and major city are shown in Table 1.
Local taxes collected as a result of new and expanding industries are important
considerations in economic development. Recruiting projects is costly. Tax impacts
are important measures of the return on investment. Local taxes include sales tax -
es, property taxes, and other business taxes and fees. Table 2 shows the annualimpacts on local taxes for each year’s economic development announcements.
Annual Local Tax Impacts*
2013 Projects
($000)
2014 Projects
($000)
2015 Projects
($000)
TOTAL
($000)Sales Taxes $6,908 $13,879 $9,569 $30,356
Property Taxes $4,864 $9,812 $6,178 $20,854
Other Taxes $218 $444 $324 $986
Regional Total $11,990 $24,135 $16,071 $52,196
*In the year all projects are fully realized
Table
2
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January 2016 UAH: Economic Impacts – Executive Summary page | 24COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
The economic impacts on the North Alabama region from the economic development project announcements in 2013, 2014, and 2015 are tremendous. This economic development pro-
duction has created opportunities in the region for 15,200 new jobs, a $4.2 billion annual expansion of the regional economy, and $52 million in additional annual local taxes. These chartsshow estimated impacts for a ten-year period starting with the year project construction begins.
CumulativeImpacts of
Economic
Development
Announcement
2013-2015
Figure
1
*Shown in Current Dollars
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January 2016 UAH: Economic Impacts – Executive Summary page | 25COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Impacts ofEconomic
Development
2015
Announcements
Figure
4
*Shown in Current Dollars
The impacts from 2015 announcements are depicted in the Figure 4 graphs. The total job creation from capital investment is about 4,000 jobs. The total operating jobs grow from about
2,460 jobs in 2016 to over 5,300 jobs in 2025. The total economic output due to capital investment in 2015 is approximately $506 million, and the total economic output impact rises from$840 million to $2 billion in 2025. The total impact of taxes ranges from $7 million in 2016 to more than $15 million by 2025.
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January 2016 UAH: Economic Impacts – Executive Summary page | 26COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Impacts of
Economic
Development
2014
Announcements
Figure
3
*Shown in Current Dollars
The impacts for the announcements made in 2014 are shown in the Figure 3 graphs. The capital investment employment impacts total 3,258 capital investment jobs. The total job creation
increased to more than 6,500 jobs by 2023. The economic output impact in terms of capital investment was $423 million. Operations related economic output grows from about $580million in 2015 to approximately $1.9 billion over ten years. Total local tax impacts rose from roughly $8 million in 2015 to $24 million in ten year period.
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January 2016 UAH: Economic Impacts – Executive Summary page | 27COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY
Impacts of
Economic
Development
2013
Announcements
Figure
2
*Shown in Current Dollars
The graphs for 2013 shown in Figure 2 depict the impact assessments for employment, output, labor income, and local tax for the announcements made in 2013. The employment impacts
of the announcements made in 2013 indicate an impact of 4,073 capital investment related jobs in 2014. The operations related jobs impact is estimated at 1,537 in 2014, and growing
to 3,314 by 2015, and would continue at this level over the 10-year period shown. The economic output impact for the announcements made in 2013 indicate a total impact of over $533
million from capital expenditures, and a total output impact from about $322 million in 2014 growing to about $787 million by 2023. The Labor income impact from the 2013 announce-
ments totals $100 million in 2014 growing to about $246 million by 2023. The impact on local taxes from the 2013 announcements is expected to be about $5.6 million in 2014, and grow
to about $12 million after 2015.
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May 2016 Huntsville Regional Economic Growth Initiative CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY page | 28
Chamber of Commerce of Huntsville/Madison County
225 Church Street NW, Huntsville, AL 35801
256-535-2000 • hsvchamber.org
256-824-5326 • uahcmer.com
Researchers
Brinda Mahalingam, Ph.D., Economist
Jeff Thompson, Project Director
Karen Yarbrough, Editor
Questions regarding the analysis and report should be directed to:
Jeff Thompson, Project Director256.361.9065 | [email protected]