By the Economic Development Partnership of North Carolina
North Carolina levies the lowest corporate tax rate in the nation. The state also touts a world-class labor pool that includes the largest manufacturing workforce in the Southeast, low costs of doing business, and a young and educated workforce – either trained at North Carolina’s strong universities and community colleges or moving into one of the fastest-growing states in the nation.
These are a just few reasons why companies choose North Carolina as the best place to locate or grow their business. Judging by recent project announcements and the latest business rankings, nothing is slowing down North Carolina’s strong momentum.
In 2017, for example, North Carolina rose to No. 1 on Forbes “Best States for Business” list, breaking into the top spot that only two other states had held since the annual study was launched in 2006. And North Carolina is the only state that has always appeared among the Top 5 of the Forbes list.
For four straight years, Site Selection magazine has ranked North Carolina a No. 1 competitive state for attracting new and expanded corporate facilities, while over the same period Chief Executive magazine has ranked the state its No. 3 best for business.
“The things that keep drawing companies — and people — to North Carolina haven’t changed all that much,” said Christopher Chung, chief executive officer of the Economic Development Partnership of North Carolina, which recruits new industry to the state.
“The quality of life, the great educational institutions, a population growth rate that’s among the country’s fastest, fueled largely by in-migration from the Midwest and Northeast. These have been, and will likely continue to be, the biggest reasons why companies gravitate toward North Carolina as a business location.”
A Banner Year
In 2017, new and expanding companies announced they would create nearly 20,000 new jobs in North Carolina, making last year one of the state’s best for job recruitment in over a decade. In fact, the tally was a one-third increase over 2016.
Last year, North Carolina’s largest deals by jobs announced included Allstate Insurance’s 2,250-job expansion in Charlotte; India-based technology consultant Infosys’ new 2,000-job hub in Raleigh; and global banking giant Credit Suisse’s 1,200-job expansion at Research Triangle Park.
Photo Caption: In September 2017, Infosys announced Raleigh would be the home of its 2,000-job North Carolina Technology and Innovation Hub. Pictured from left to right are Infosys Chief Financial Officer M.D. Ranganath, Raleigh Mayor Nancy McFarlane, North Carolina Commerce Secretary Anthony M. Copeland, and Infosys President Ravi Kumar. “We found the academic ecosystem exceptional,” Kumar said. Photo courtesy of Infosys
Smaller cities also saw some big wins in 2017, many of them involving foreign-based firms. They included German health care company Fresenius Kabi’s 445-job expansion in Wilson and Austria-based EGGER Wood Products’ choice of a site southwest of Lexington for its first U.S. plant – a $300 million facility that will hire 400 people over the next six years. Over 15 years, EGGER expects the plant to grow into a $700 million complex employing 770 people.
“Our goal is to position ourselves as one of the leading brands for wood-based solutions in the U.S., as we are already in Europe,” Egger Chief Technology Officer Walter Schiegl said when he announced the new plant in North Carolina’s Davidson County.
Egger is the first major development at the 430-acre, county-owned I-85 Corporate Center, where the company plans to ultimately build on 200-plus acres.
There’s also Chinese tire maker Triangle Tyre’s planned 800-job, $580-million manufacturing facility at the Kingsboro megasite east of Rocky Mount.
Triangle Tyre Chairman Ding Yuhua said North Carolina’s central East Coast location, quality of the local workforce, and the warm welcome from state and local officials were all factors in choosing the state.
“The more I learn about North Carolina, the more strongly I feel that North Carolina is the right choice for Triangle,” Ding said. “In addition to its strategic location, which provides cost-effective transportation, the citizens of North Carolina are diligent and enthusiastic. The state has a large working-age population, healthy economic development environment and well-established education system.”
Photo Caption: At an event held at the governor’s mansion, North Carolina Governor Roy Cooper (left) and Triangle Tyre Chairman Ding Yuhua celebrate Triangle’s choice of North Carolina for its first plant outside China, a $580 million facility that will employ 800 people at full production. Photo courtesy of Triangle Tyre.
But North Carolina isn’t resting on its laurels. In fact, there’s no resting at all. The state continues to build the right combination of talent, resources and place that persuades companies to move here. Here are a just a few reasons why:
1) An Affordable Place to Do Business. North Carolina’s superior business environment includes a tax climate that supports companies locating and growing in the state.
In fact, North Carolina has the third-lowest business tax burden among all 50 U.S. states, according to a study released in June by the experts at Anderson Economic Group, a consulting group based in East Lansing, Michigan.
To produce its 2018 State Business Tax Burden Rankings Report, Anderson considered 11 taxes that businesses pay to state and local governments, not just a state’s corporate income tax. The tax categories considered included property, sales, corporate income, excise, severance and more. The report measures the share of business profits that went toward state and local taxes in 2016, the most recent year of data available.
North Carolina tends to keep taxes affordable across the board, Anderson has said. The state also has one of the lowest general sales tax burdens in the country, the study says.
North Carolina’s business-friendly tax climate also includes a three percent corporate income tax, which is scheduled to drop to 2.5 percent next year. North Carolina’s corporate income tax is currently the lowest among all 44 states with the levy. The state’s flat individual income tax rate will decrease to 5.25 percent in 2019.
In addition, in 2018 the state fully implemented single sales factor apportionment for multistate corporations – meaning that corporate income subject to state tax is now based solely on North Carolina sales rather than a company’s property and payroll in the state. This move encourages facility expansions and new hiring.
Companies considering the state’s favorable tax climate, alongside its low electricity rates, construction and labor costs, find it hard to say no to North Carolina. The state, in fact, has the second-lowest business costs (labor, energy and taxes) in the nation, according to Forbes, and its labor costs are ten percent below the national average and the fifth-lowest in the country.
2) Connected to the Wider World. Manufacturers in North Carolina not only enjoy a central location on the East Coast, they have excellent access to U.S. markets via the nation’s second-largest state-owned highway system. Primary transportation arteries — including I-95 along the length of East Coast, I-85 through the Southeast, I-40 stretching to California and I-77 connecting Ohio to South Carolina — put over 150 million people within a day’s drive.
The state also provides four international airports and 11 regional airports. It’s home to two deep-water ports located along major Atlantic shipping lines, and offers direct access to additional major ports along the U.S. Eastern Seaboard.
Any company shipping by rail is impressed that North Carolina has two Class I carriers – Norfolk Southern and CSX – with direct connections to major North American markets. Class I comprises the largest freight carriers in the nation. The state also has two intermodal service hubs that efficiently switch containerized goods between trucks and trains as they head to their final destination.
3) A Superior and Growing Workforce. At 10 million and counting, North Carolina is the ninth-most populous state in the country and growing fast. Thanks to an unparalleled quality of life and significant career opportunities, talent is relocating to the state. We’re also growing it here. Across the state, students are seeking degrees at 53 colleges and universities; over 22,000 STEM grads enter the North Carolina workforce each year.
Meanwhile, the 58-campus community-college system is the nation’s third-largest network and a national model for customized workforce training. And the state’s 100,000-plus active-duty military personnel offer ready technical skills as they enter civilian life.
In addition, the state’s young, well-educated and growing workforce has helped make it fertile ground for startups. In fact, WalletHub currently ranks Charlotte, Raleigh and Durham among its Top 10 to start a business.
4) High Performance in Diverse Industry Sectors. One of North Carolina’s strengths is its strong performance across a wide variety of industry sectors, ranging from biotech and IT, to aviation and automotive, to food processing, financial institutions and more.
The state, in particular, is a national leader in manufacturing. With more than 464,000 manufacturing workers in the state, North Carolina boasts the largest manufacturing workforce in the Southeast. Here are just a few of the manufacturing sectors that are thriving – and growing – in the state:
Aerospace and defense. Global accounting firm PwC ranks North Carolina as the fourth most-attractive state in the nation for aerospace manufacturing, in its 2017 Aerospace Manufacturing Attractiveness Rankings. Dozens of leading aerospace and defense companies operate in North Carolina, including pioneers such as GE Aviation, Honda Aircraft Company, Spirit AeroSystems and ATI Specialty Materials. With 76 percent growth from 2007 to 2016, the state was home to the second fastest-growing aerospace product and parts manufacturing sector in the U.S. Over 1,000 companies make up North Carolina’s aerospace supply chain — from repair and maintenance to parts manufacturing. Since 2013, jobs in North Carolina’s aerospace industry have increased 36 percent.
Information technology. North Carolina’s information technology (IT) cluster has grown 12 percent in the past five years. A hotspot for technology talent, North Carolina state is home to 44,085 IT workers across 1,449 establishments. In 2016, North Carolina’s educational institutions awarded 22,751 degrees and certificates related to science, technology, engineering, and mathematics (STEM). The state also boasts the resources of Research Triangle Park (RTP), the largest research park in North America. RTP is home to more than 200 of the world’s most innovative companies, employing more than 50,000 people. Other parks that serve the IT industry include the Wake Forest Innovation Quarter in Winston-Salem, Gateway University Research Park in Greensboro, and the Charlotte Research Institute.
Food and beverage manufacturing. North Carolina’s food and beverage manufacturing industry is the second-largest in the United States by gross economic output. The industry in North Carolina encompasses over 1,000 business establishments, including big names such as Frito-Lay and Campbell Soup Company, as well as Sierra Nevada and other craft brewers experiencing exponential growth. With 24 of the largest 50 food and beverage companies operating in the state, jobs in the industry have grown 10 percent in the past five years.
Automotive manufacturing. The state is home to 266 automotive manufacturing businesses. And, employment in the state’s automotive industry is growing, increasing 31 percent since 2010. Thirty-three of the top 100 global automotive parts manufacturers in North America have operations in the state, and customized training programs throughout the state’s community college system support the industry’s continued expansion.
Interested in locating or expanding your company in North Carolina? The Economic Development Partnership of North Carolina helps companies identify available buildings and sites across the state, navigate incentives for relocation or expansion, find workforce solutions and more. For more information, call (919) 447-7744 or email clientservices@edpnc.com.
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