2013 US Investment Monitor. Tracking mobile capital investments during 2012

Transcription

1 2013 US Investment Monitor Tracking mobile capital investments during 2012

2 The projects announced in this demands of US consumers and industries: faster and smaller computer and mobile phone sources of energy, and corporate headquarters and data centers to support growth across the entire economy.

3 The 2013 US Investment Monitor The nearly 5,500 business investment announcements in 2012 that are analyzed in this edition of the US Investment Monitor (USIM) accounted for $168 billion of capital investment in business facilities and 350,200 new and retained jobs in the United States. The projects demands of US consumers and industries: faster and smaller computer and mobile phone chips, cleaner across the entire economy. attractive for mobile capital investment, with Texas and The USIM focuses on companies mobile capital headquarters facilities, data and call centers, state and local tax systems. Because companies these mobile capital investments serve as indicators of a and competitiveness. The companies investment decisions also help inform other investors of investment opportunities and, perhaps most importantly, shape the The 2013 US Investment Monitor 1

4 Announced projects in 2012 accounted for $168 billion of mobile capital investment and 350,200 new and retained jobs in the US. mobile capital investment, led by Texas, Louisiana in this year s USIM. This year s USIM is evidence that the US remains an investment and over 64,400 new and retained jobs. This was a repeat of 2011 when mobile investment their historical roles as top investors, and were joined by companies from South Africa, the United in the semiconductor and electronic component uses. capital investments and few employees. installation expenditures across the US totaled approximately $35 billion, and contributed record announced capital investment in this year s USIM. jobs in this year s USIM. Automotive, semiconductor terms of announced capital investment and new or retained jobs. 2

5 Top 20 capital investment announcements portion of the total investments announced investment announcements accounted for the total capital investment analyzed in this year s USIM. These projects are summarized in Table 1. announcements, the expansion of a natural investment. Chemical manufacturing announced in 2012 were related to projects represent the industry s desire can be converted to the petrochemicals ethylene and propylene for use in the additives and other materials. The 11 Table 1 accounted for over $25 billion of capital investments in invest $5 billion for a new site in Baytown, 1.5 million metric tons of ethylene a year as well as two new polyethylene plants. The company indicated that the Baytown ethane and ethylene pipelines and in 2012, both part of a major expansion at its Freeport, TX facility. Dow, already announced a $1.7 billion investment for that will create 150 new jobs, as well as a $1 billion investment for the creation of create 70 new jobs. Sasol Ltd. announced that it would invest an additional $8.5 billion and create an billion investment was announced at the same facility. The 2013 US Investment Monitor 3

6 Semiconductors in 2012 were semiconductor fabrication facilities. All renovation of its Austin, TX fabrication plant. The processors in an effort to reduce the company s expansion is expected to create 500 new jobs. OR research facilities, at an expected cost of $3 smaller feature sizes on computer chips. capacity to its cleanroom, where semiconductors are manufactured on 350 mm silicon wafers. The to 300,000 square feet and 60,000 wafers a month, and will create 250 new jobs. Table 1. Top 20 projects ranked by capital investment, 2012 Company Name State Product/facility use Investment (in US$ millions) Sasol Ltd. LA $ 8, LA 6, TX 5, TX Semiconductors 4, OR Semiconductors 3,000 Undisclosed Semiconductors 2, , TX 1, TX 1, IA 1, , IA 1, ND 1, TX 1,000 Undisclosed TX 1,000 Undisclosed Baxter International, Inc. 1,000 1,500 TX 1, Apple, Inc. Data center 1, IN 80 Benteler Steel & Tube LA Steel tubes 675 Source: EY analysis of Conway data and additional research. Jobs 4

7 Top 20 job announcements The projects included in this year s USIM announced the creation or direct retention of 350,200 jobs across the United States. retained jobs and are summarized in Table 2. Automotive and aircraft manufacturing industries. Overall, the transportation new jobs. company announced a $300 million investment for an innovation center jobs. The announcement is part of the operations, and is the second of four planned innovation centers in the US. Nissan North America Inc. announced an investment of $20 million and the creation of 1,000 jobs to expand its MS. The expansion will allow for the production of three new lines of vehicles, Sentra. the result of the relocation of employees publications. Airbus announced a $600 million investment and the creation of at least facility in Mobile, AL. The facility will house the new A320 family assembly line aircraft. announced the creation of a second shift and more than 1,100 jobs at its Daimler press release, a majority of the The 2013 US Investment Monitor 5

8 Semiconductor and electronic component manufacturing Overall, companies in the semiconductor and electronic and the creation of new centers for operations and customer support. project, a $304 million investment for a new campus in Austin, TX that is expected to create 3,600 jobs. This new facility, deemed by the company as its operations in North and South America. Apple also announced the creation of several data centers in Ericsson, the Swedish telecommunications expansion of its North American headquarters in jobs to the city. Table 2. Top 20 projects ranked by new and retained jobs, 2012 Company Name State Product/facility use Investment (in US$ millions) Apple, Inc. TX $ 304 3, ,000 TX Undisclosed 2,000 Financial services 0 1,700 Ericsson TX Telecom equipment 54 1,600 Baxter International, Inc. 1,000 1,500 MI Innovation center 300 1,500 Tractors 200 1,400 Aircraft Undisclosed 1,350 MA 57 1,180 TX Financial services 3 1,100 Undisclosed 1,100 Amazon.com, Inc. IN Distribution center 150 1,050 Financial services 750 1,000 Airbus AL Aircraft 600 1,000 NJ 1,000 Oil 140 1,000 TX Airlines 100 1,000 Nissan North America Inc. MS Automobiles 20 1,000 AL Ships 5 1,000 Source: EY analysis of Conway data and additional research. Jobs 6

9 Industry insights Table 3 shows total announced jobs and of jobs announced in Financial and professional services projects accounted for expanded facilities in 2012 and renewable capital investment. Transportation equipment manufacturing The transportation equipment in Investment in the industry transportation manufacturers, but 7 of Aerospace industry investment increased from under $1 billion in 2011 manufacturer Airbus. Airbus announced that it will invest $600 million in a new which will create 1,000 new jobs by million of investment for two new innovation centers as part of the automotive innovation. The locations Austin, TX, where 1,500 and 500 jobs will open at least two more innovation centers in Investment in the automotive vehicle industry continued to be focused in states traditionally favorable to automotive total capital investment and total jobs. add 300 jobs and is the fourth major expansion of capacity since the facility The 2013 US Investment Monitor 7

10 Food and beverage manufacturing In 2012, companies in the food investment of $6.6 billion in new facilities, and more than 20,000 jobs. Investments In 2012, six investments were made by developed a loyal customer base and its made in 2012 was a $450 million facility Idaho. Upon completion, the new facility facility in the world, and will employ 300 people. to customer demand for healthier distribution hub. The $130 million capital new jobs. ramen noodles and related products in the US, announced it will build a $330 Antonio, TX to relieve pressure on its They expect the new facility to reach full production capacity by the start of The Japanese company chose San facility due to low labor and electricity costs, as well as its proximity to the Chemical fertilizer manufacturing Announced investment in the chemical 2011 to $34.3 billion in 2012, prompted by intensive process and new investment has and the proximity to US farmers has made the US an attractive location for fertilizer countries and the development of this to reduce their dependence on fertilizer from abroad. that will create up to 80 new jobs by The facility will include emission 8

11 Financial and professional services Investment and job announcements in the increased from $7.3 billion and 78,000 jobs new jobs. The creation or expansion of call job creation and retention in the sector. Due and professional services, these projects job creation than capital investment. occupy a call center previously occupied by American Express. BB&T plans to and support roles. it intends to invest $750 million in a new corporate headquarters in Stamford, within 10 years. Teletech Services announced it will invest $12 million to open a state of the art call create up to 700 direct jobs. Table 3. Announced capital investment and jobs in US facilities, 2012 Industry Investment (in US$ millions) Jobs Agriculture, construction, oil/gas extraction and services $14,800 11,700 8,100 3,600 Renewable energy generation 36,700 N/A 25,700 11,000 Non-durable manufacturing 56,600 71,900 34,300 11,100 Rubber and plastics 7,300 6,200 6,600 20,200 3,200 7,600 16,800 2,300 10,000 Durable manufacturing 35, ,300 Semiconductor and electronic component 13,200 25,400 Transportation vehicle 10,700 38,800 Machinery and fabricated metal 35,000 2,600 14,100 Information 4,700 14,600 Information 2,400 Data centers 2,300 5,300 Financial and professional services 9,300 85,800 34,800 Financial, insurance, and real estate services 3,000 22,100 Business support services 1,200 21, ,000 Other services 800 5,600 Trade and transport 10,700 52,900 6,400 35,100 4,300 17,800 Total $168, ,200 Source: EY analysis of Conway data and additional research. The 2013 US Investment Monitor 9

12 projects announced in 2012 varies widely by sector. announcements in the automotive and aerospace and professional services is the least capital intensive and retained job. the most capital intensive projects of the year, with 2012 projects. 1 Figure 1. Capital intensity of projects by sector, 2012 (announced capital investment per job) Chemical and petrochemical manufacturing Agriculture, mining and construction Non-durable manufacturing (not including chemicals) Information Durable manufacturing $368,000 $320,000 $313,000 $1,265,000 $3,086,000 Trade and transport $202,000 Finacial and professional services $109,000 Source: EY analysis of Conway data and additional research. created by these project investments is undisclosed. 10

13 Investment by type of facility Table 4 summarizes announced mobile capital investments in 2012 by type of facility. Investments in new or expanded industrial facilities accounted for often include internal R&D operations within the same as an industrial facility instead of R&D. This is the case foot expansion will allow the company to increase its will also serve as the company s R&D center. A number of investments in distribution and The share of total investment attributable to wind and centers has remained steady. Table 4. Announced mobile capital investments by facility type, 2012 Facility type Investment Employees US$ millions % of total Number % of total Industrial facilities 173,200 36,700 16, ,600 42,100 Data center 2,600 5,400 Total $168, % 350, % Source: EY analysis of Conway data and additional research. capacity created. Therefore, the number of jobs created is not available. The 2013 US Investment Monitor 11

14 Green economy: renewable and sustainable energy investment trends historic year, with investments in renewable sustainability while federal tax credits helped power investment in renewable investment in wind and solar power investments in Investment in wind economy. Wind power generation and component manufacturing Texas, the perennial leader in wind capacity, their electricity from wind. These numbers are well above historic levels; in 2010, only its electricity from wind. led to new investments in the wind turbine million in a headquarters facility and factory that will create 150 new jobs by ZF that announced it will add 100 new jobs Figure 2. Cumulative US wind energy capacity, megawatts 80,000 70,000 60,000 50,000 40,000 35,068 40,283 46,930 60,007 30,000 20,000 10, ,065 16,702 11,450 2,456 4,147 4,557 6,222 6,619 8, Note: Annual capacity additions and cumulative capacity may not always add up due to decomissionings and repowers. Source: American Wind Energy Association data. 12

15 for 10 years, was extended to cover projects that start construction in Uncertainties over the demand for new installations. Table 5. Capital investments in US wind power installations, 2012 State Estimated installation expenditures (US$ millions) Texas $3,538 3,127 2,773 2,173 Illinois Iowa 1,571 1,234 1,178 1,062 Rest of United States 5,786 Total $25,000 Note: Figures may not sum due to rounding. Source: EY analysis of American Wind Energy Association data. Solar power generation and component manufacturing utility installations as they were responsible for the completed in 2012, some of which were recipients The 2013 US Investment Monitor 13

16 to be installed at over 3,000 dealerships across the country and the facility will create at least 200 new jobs. Investments solar power stations. The investment is expected to create 50 new jobs. Table 6. Capital investments in US solar power installations, 2012 State Estimated installation expenditures (US$ millions) $3,416 Arizona 2,350 New Jersey Nevada Massachusetts Maryland 246 Texas Rest of United States Total Note: Figures may not sum due to rounding. Installations are of gridconnected photovoltaic energy only. Source: EY analysis of Solar Energy Industry Association data. Data centers for the US economy in 2012, but the or natural disasters. In 2012, Apple announced a $1 billion investment in Reno, carbon data center powered by a fuel cell wastewater treatment plant. The project in facility, but if successful it will be scaled to 14

17 Foreign investment of capital investment in new and expanded Bureau of Economic Analysis shows that in 2010), multinational companies, facility investments that are reported in the USIM. This year s investment was concentrated in the chemical and semiconductor and electronic components of the top ten capital investments in the the $8.5 billion expansion by Sasol, an headquartered in South Africa. The Swedish Ericsson, announced that it would be As shown in Table 7, companies continue to choose the US for new projects. For the second year in a row, South Africa dollar investment by Sasol. In 2011, the 2012, the company announced plans to nearly double its capital investment in the chemical cellulose manufacturer, and the in the USIM, announced a $170 million investment in Minnesota. In 2012, Japanese companies announced plans to invest $4.6 billion investment was announced by companies in the automotive industry. Japanese Toyota announced plans to invest $400 The company also announced a $350 million investment in a new facility in imported from Japan. The Japanese announced the creation 600 jobs at its new San Antonio, TX facility. The Maruchan project alone accounted for Japanese investment in the US in The 2013 US Investment Monitor 15

18 plans for $4.5 billion of US investment in new and expanded facilities in fabrication operations in Austin, TX. announcement ever made in the state of Texas and is expected to create 500 jobs. $4.5 in new and expanded facilities in facility. Daimler announced the creation of more than 1,100 new jobs by the end of in both 2011 and The United Arab due to the announcement of an expansion investment in 2012 were Texas, Louisiana, industries. Table 7. Announced foreign investment in US facilities by origin country, 2012 Investor origin Investment (in US$ millions) Jobs South Africa $8, Japan 4,600 11,800 4,500 4,600 4,500 The Netherlands 3,200 4,200 UAE 2, France 2,400 5,200 2,300 4,800 2,000 3,500 Switzerland 1,600 6,200 18,300 $42,600 64,400 Source: EY analysis of Solar Energy Industry Association data. 16

19 How the USIM compares to aggregate economic data Data from the U.S. Bureau of Economic direct investment. This is consistent with of total employment attributed to announcements of new or retained jobs by Data from the U.S. Bureau of Economic Analysis also shows that when measured in terms of absolute employment, Figure 3. Employment from foreign direct investment in the United States as a percentage of existing employment by state, 2010 Hawaii Alaska Lower employment from FDI Higher employment from FDI Note: Due to minimum reporting standards, data was not available for Rhode Island, South Dakota and West Virginia. Source: EY analysis of U.S. Bureau of Economic Analysis International Economic Accounts data. The 2013 US Investment Monitor 17

20 Top states by capital investments states continued to compete for capital investments in major new facilities in The 10 states that were the most 10 states in terms of announced mobile capital investment. Texas in the nation for the amount of mobile investment it attracted. Louisiana. Announced mobile capital investment in Louisiana was $22.1 billion approximately $7 billion. Nearly all of the announced investment in Louisiana was for all new mobile investment in the state. Louisiana offered customized incentive acquisition and infrastructure costs, as well as access to the Louisiana Economic Pennsylvania. Announced mobile capital western part of the state near the Marcellus investment. Ohio of industries contributed to $7.4 billion of announced mobile capital investment in Ohio in 2012, up from $5.8 billion were in the petrochemicals and liquid and wholesale and retail trade industries. Michigan. In 2012, companies announced $7.1 billion of mobile capital investment in by automotive companies represent the diverse needs of the industry, from the 18

21 Iowa. The majority of mobile capital investment announced in Iowa in 2012 came from two fertilizer announced in Iowa history, followed closely by The Development Authority Board approved over $114 million in total tax credits to incentivize both of the projects. New York. Figure 4. Top 10 states for mobile capital investments, 2012 (US$ billions) 30 $ $ $ $7.4 $7.1 $6.9 $5.6 $5.1 $5.0 $ TX LA PA OH MI CA IA NY GA IN Source: EY analysis of Conway data and additional research. investment announcements. Figure 5. Top 10 states for mobile capital investments, (US$ billions) 120 $ $ $50.7 $ $37.5 $34.4 $32.2 $29.2 $28.7 $ TX LA PA OH MI IL NY IN NC IA Source: EY analysis of Conway data and additional research. The 2013 US Investment Monitor 19

22 state economies. As was the case in 2011, Louisiana attracted the most mobile capital relative investment. Figure 6. Mobile capital investment per dollar of state GDP, 2012 Hawaii Alaska Lower employment from FDI Higher employment from FDI Source: EY analysis of Conway data and U.S. Bureau of Economic Analysis National Economic Accounts data. 20

23 Top states by announced jobs In 2012, 350,200 new and retained jobs Texas. in 2012 in Texas were concentrated in total job announcements in the state were related to semiconductor and electronic invest $304 million to expand its Austin campus, which will create 3,600 jobs Ericsson and Texas Instruments also state. Overall, announced mobile capital investment projects will contribute over 38,200 new or retained jobs in Texas. Ohio. 24,100 new or retained jobs in The headquarters, which will create 575 jobs. area. The state also saw the announcement and professional and business support industries. Dunnhumby USA, Quantum announced that they will add at least 400 jobs to the state. North Carolina. new or retained jobs in Three of the state were for new or expanded call and by BB&T of a corporate center in 1,700 administrative and support jobs. Enterprises, NetApp and RTI International will create over 1,400 jobs. Pennsylvania. in terms of the number of announced new the state announced the creation of over 20,600 jobs in An attractive state for at the Marcellus Shale, projects in these announced a $140 million expansion and renovation at the oldest continuously 2012, but as a result of their investment, 850 jobs and create 150 new jobs. Shell industries. The 2013 US Investment Monitor 21

24 Georgia. that will create 1,500 jobs in the metro Atlanta area, proposed locations. The top 10 states for new mobile project jobs in , except Florida, which fell to number 11 this year Figure 7. Top 10 states for new mobile project jobs, 2012 (thousands of jobs) TX OH NC PA GA MI TN IL IN VA Source: EY analysis of Conway data and additional research. 22

25 Figure 8. Top 10 states for new mobile project jobs, (thousands of jobs) TX OH MI NC IN PA VA GA TN FL Source: EY analysis of Conway data and additional research. Employment associated with announced mobile capital investments was spread across the south central and southeast Figure 9. Announced mobile project jobs as a percentage of existing employment by state, 2012 Hawaii Alaska Lower employment from FDI Higher employment from FDI Source: EY analysis of Conway data and U.S. Bureau of Labor Statistics data. The 2013 US Investment Monitor 23

26 Conclusion investment in chemical and petrochemical indicate that more corporate headquarters and support centers are needed to maintain as both environmentally sustainable and conclusion that the United States remains an internationally attractive location for mobile capital investments. business facility investments can help environment for new investment. Tax and supply chain considerations all play a role in a company s decision to invest in a particular location for mobile capital investment. Similarly, businesses should be aware of the investment environment in the the overall investment and job creation associated with announced projects, the diversity and mobility of the USIM projects demonstrates that states must continue to offer competitive business climates to industries. 24

27 Understanding the USIM Project analysis criteria The USIM departs from typical analyses industry and announcement criteria for mobile capital investment. The following criteria are used to identify USIM projects Project types: Investments in most production and service facilities are is determined by the primary business cases, the company industry and project facility expansion by a manufacturer) but in some cases the project type and industry center investment by a manufacturer). entertainment, hospital, retirement home, museum, education, restaurant, hotel, airport and public infrastructure projects because these facilities are not and distribution facilities for all industries are included because these facilities are The USIM also includes wind and solar concentrated in the areas where natural resources are located, these projects are mobile across alternative locations and factors. Announcement or construction date: expansion projects, machinery and may not be publicized until they occur, and are captured in the USIM database projects that were announced in 2012 or announcement. Announced projects may have been delayed or cancelled. Job creation: associated with announced projects in this includes data on jobs retained at a facility as a result of new investment. Data sources Statistics on new projects were obtained corporate press releases and independent The 2013 US Investment Monitor 25

28 About the US Investment Monitor (USIM) the input of our Quantitative Economics and Statistics (QUEST) and Indirect Tax Incentives practices. QUEST assists businesses at every step of the quantitative analysis process from data collection to analysis to action. This multidisciplinary practice combines business and industry experience with capabilities analysis and revenue estimation; economic QUEST also provides analyses to support tax economists and statisticians to produce quantitative studies of a variety of federal, clients with estimates of potential economic investment, business relocation, economic development initiatives, tax reform Indirect Tax Incentives professionals in the Indirect Tax practice comprise a dedicated understand the business incentives arena and how investment in people, property, affect a company s tax position. They use tax exemptions; income or franchise tax credits; sales and use tax refunds; reimbursements; employer credits; and transaction and advisory services. and our wider communities achieve their potential. For more information about our Indirect Tax focuses on the tax processes its state and local tax costs. Our Indirect Tax professionals offer a broad array of both tax compliance and advisory services initiatives. 26

29 The 2013 US Investment Monitor 27

30 Ernst & Young LLP contacts Quantitative economics and statistics (QUEST) Principal Analyst homas inrade also made signi cant contributions to this report. Business incentives and tax credits Mary Faye LaFaver Discretionary Incentives Leader Ali Master Incentives and Credits Practice Leader National Director, Tax Credit Investment Advisory Services

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32 Tax Transactions Advisory About EY and quality services we deliver help build and for our communities. refer to one or more, of the member firms of does not provide services to clients. For more visit ey.com. in the US. ED None