Manufacturing, gaming boost new, expanded facilities in state

Mississippi Business Journal, The, Jun 9, 2008 by Northway, Wally

Anyone who routinely monitors the Mississippi Development Authority's (MDA's) "Summary of New and Expanded Facilities Announced in Mississippi" will notice some interesting departures from the norm. The first five months of the year has produced some "surprises."

For instance, perennial top-spot-holder Hinds County came very near to being dethroned in the number of new and expanded facilities unveiled. And, it is currently in second in new facilities behind Harrison County despite the continuing issue of lack of affordable and/or available commercial insurance on the Coast post-Hurricane Katrina.

Manufacturing is seeing a solid year thus far. While the industry is struggling in other parts of the nation, and has faced significant challenges here, in Mississippi over the last few years, the state's goods-producers are more than holding their own.

Perhaps the most surprising fact, however, is that the estimated capital investment in expansions exceeds that in new facilities. In fact, expansions have almost doubled up new construction. And, that is largely due to the manufacturing industry.

(Note: The MDA compiles its report from a variety of sources. It is not meant to be comprehensive, but offers an interesting "snapshot" into expansions and new construction. The report is available online at www.mississippi.org.)

Hearing footsteps

Buddy Edens, president of the Mississippi Associated Builders and

Contractors, says his members are finding plenty of work despite the challenges on the Coast.

"Our members are seeing a lot of work in and around Jackson, as well as outlying areas," he says. "When the commercial insurance issue is resolved on the Coast, I think you will see even more activity."

Given the issues on the Coast, Harrison County's numbers are even more impressive. The report credits Harrison County with the most new facilities with 10, topping Hinds County's seven. Harrison County finished second to Hinds County in expansions (18 to 14), thus finishing second to Hinds County by a mere project in the combined expanded/new facility ranking (25 to 24).

Other counties that almost always are near the top in combined new and expanded facilities are there again Rankin (14), Lafayette (nine), Lee (eight) and Madison (seven).

North on a roll

The first "surprise" on the combined list is found at number seven. Alcorn County in extreme Northeast Mississippi lands there with five projects, tying bustling DeSoto County. And, other North Mississippi counties not usually ranked as high are flexing their muscle. Tippah County has four, equaling Jackson and Lamar counties, and Marshall, Monroe and Pontotoc counties each have two, as many as Forrest, Lauderdale and Lowndes counties.

The knee-jerk reaction would be to lay this at the feet of Toyota. The automobile maker is building a new plant in Blue Springs, and existing companies are gearing up while new businesses that will serve as Toyota suppliers are beginning to build.

However, David Rumbarger says not so fast. Certainly the coming of Toyota is a catalyst, but he says there is more to the story than that.

"In counties like Tippah, you are seeing a more concentrated effort at economic development," said Rumbarger, head of the Community Development Foundation in Tupelo and a key player in recruiting Toyota. He adds that new infrastructure, particularly road construction, has enhanced the regions attractiveness to prospects. Transportation has been a minus for North Mississippi for years, but that is changing, he says.

Ramping up production

In terms of individual projects, gaming and commercial developments, as usual, are well represented on the largest new and expanded projects unveiled. But, manufacturing is showing new life so far, and, once again, it's not all about Toyota. There were 25 new and expanded manufacturing facilities announced, which are expected to create an estimated 1,302 jobs and represent an estimated capital investment of approximately $824.43 million.

Jay Moon, president and CEO of the Mississippi Manufacturers Association recently wrapped up a media tour during Manufacturing Week. He says he found an attentive and often excited audience.

"People love to talk about manufacturing," he says. "They've heard all of this positive news lately."

Moon attributes the resurgence of Mississippi's manufacturing sector to its diverse base of goods-producers, location and infrastructure, advantages offset somewhat by burdensome taxes and lack of workers, particularly skilled ones.

If Keesler Air Force Base was not undergoing the largest construction project in U.S. Air Force history ($950 million), SeverCorr's $500-million expansion would be king. Other large manufacturing expansions include Nissan North America in Madison County ($118 million), Kingsford Manufacturing Inc. in Alcorn County ($37 million) and Northrop Grumman Ship Systems in Jackson County ($31.5 million).

All of these "high-end" expansions have created the ultimate anomaly - the estimated capital investment in expansions is $2.7 billion, compared to $1.6 billion in new facilities. Still, new facilities far outstrip expansions in terms of job creation. The MDA's summary finds new facilities will create an estimated 3,416 new jobs, compared to expansions' 334.