By the Economic Development Partnership of North Carolina
North Carolina closed out 2018 and began 2019 on three very high notes – ranking as Forbes magazine’s No. 1 state for business for the second-straight year, posting its second-best year in over a decade in new job announcements and anticipating the arrival of three more Fortune 500 headquarters.
“It was a great year, but not at all an outlier,” says Christopher Chung, chief executive officer of the Economic Development Partnership of North Carolina, which recruits new corporate facilities and expansions to the state. “Executives often put North Carolina on their short list and for good reason. Among those reasons is that we consistently place among the Top 10 states in well-regarded business rankings from the likes of Forbes, Chief Executive and CNBC.”
Forbes has annually ranked the business climates of all 50 states since 2006. North Carolina is the only state to place among the magazine’s top five best states for business every year.
North Carolina’s labor, energy, and tax costs are all well below the national average and add up to the second lowest in the U.S. overall, according to Moody’s Analytics data cited by Forbes. And North Carolina’s 2.5 percent corporate tax rate is the lowest among all 44 states that levy the tax.
The state has affordable costs while still supplying a highly talented workforce. North Carolina boasts a well-educated labor supply fueled by graduates from 53 colleges and universities, Forbes notes, including Tier 1 research universities Duke, the University of North Carolina-Chapel Hill and North Carolina State.
In addition, North Carolina’s 58-campus community college system, the third-largest in the nation, is a national model for customized workforce training.
The state enjoys a bright economic forecast for 2019 and beyond. Forbes’ latest ranking says North Carolina’s growth in both jobs and gross state product is expected to be among the best in the country over the next five years.
Perhaps that explains why North Carolina’s population is increasing twice as fast as the U.S. average. It’s the ninth-most populous state in the U.S. and counting.
More On Those Fortune 500 Headquarters
The state’s dependably strong business climate is one reason why Fortune 100 Honeywell and Fortune 500 Advance Auto Parts decided late last year to move their headquarters to North Carolina.
Honeywell, a technology and manufacturing company that develops software-oriented solutions for some of the world’s most complex industries, relocated its global corporate headquarters from Morris Plains, New Jersey, to Charlotte, North Carolina. The $250 million move is expected to create 750 well-paying jobs in Charlotte.
Two days before Honeywell’s announcement, Advance Auto Parts revealed it was shifting its corporate headquarters from Roanoke, Virginia, to Raleigh. As part of the move, the company is expected to add 435 new jobs to the more than 700 already located in Raleigh.
The momentum of big-name headquarters relocations to North Carolina picked up speed in 2019, when Charlotte nabbed what will be the sixth-largest commercial bank by assets in the U.S.
In February, Winston-Salem, N.C.-based BB&T and Atlanta-based SunTrust banks announced they were merging and basing their new megabank in Charlotte. The combined bank will be the sixth-biggest commercial bank in the U.S. by assets. The bank’s scale is expected to make it the 13th Fortune 500 company based in North Carolina.
Adding Up the Numbers
High-profile headquarters relocations are only part of why 2018 was North Carolina’s second-best year in over a decade for new jobs attached to state-supported project wins. The state continues to attract diverse corporate investment across industries ranging from biotech and IT to aviation and automotive, from food processing and distribution centers to financial institutions and more.
The by-the-numbers results? In 2018, North Carolina closed deals on 143 new and expanded corporate facilities, projects that are expected to create 19,541 new jobs and $3.53 billion in investment. The jobs tally nearly matches the decade-topping 19,999 jobs announced with 2017 project wins.
Projects announced over the past 18 months illustrate North Carolina’s strong appeal to a broad cross-section of industries. Here’s just a sampling:
Technology firm AvidXchange, which provides cloud-based automated payments solutions for midsize companies, is adding up to 1,200 jobs at its headquarters operation in Charlotte, more than doubling its workforce there. Charlotte is also home to a recently announced 300-job expansion by Cognizant Technologies, a Fortune 500 global IT services company based in New Jersey.
Pendo, a fast-growing technology startup, will more than triple its headquarters operations in Raleigh, where it was founded in 2013 by alumni from Rally, Google, Cisco and Red Hat. Pendo is adding 590 jobs and investing $34.5 million in the expansion. “With its first-class universities, hub of technology companies, and incredible quality of life, North Carolina, and specifically Raleigh, offers the perfect setting for our team to grow,” says Todd Olson, chief executive officer of Pendo.
French firm Cellectis, a clinical-stage biopharmaceutical company developing cancer treatments based on gene-edited T-cells, selected Raleigh for its first U.S. commercial manufacturing facility. Cellectis’ $70 million plant will create 200 new jobs. It will also be the latest addition to a growing cluster of innovative companies with gene-therapy operations in North Carolina including Locus Biosciences, Precision BioSciences, Pfizer, AveXis, and bluebird bio.
Publix Super Markets plans to build a $300 million refrigerated distribution center in Greensboro, as part of a multiphase project that will create up to 1,000 jobs. In addition, Amazon is establishing three new fulfillment centers in the state in Charlotte, Garner and Kernersville that combined are expected to create 4,000 new jobs.
National General Insurance, a property and casualty insurance company, is expanding its headquarters operations in Winston-Salem, creating 626 new jobs. The company currently employs more than 1,400 people in North Carolina.
Indiana-based POLYWOOD, a manufacturer of outdoor furniture made from recycled plastics, is opening a $35.3 million manufacturing and distribution center in rural Roxboro that will create 384 new jobs. “The skilled manufacturing workforce, high level of information technology and growth potential in the state make it an excellent choice for our expansion,” says POLYWOOD Chief Executive Officer Doug Rassi.
A Few More Things To Consider
Beyond its highly skilled workforce resources and its track record in attracting companies, what are a few additional reasons for companies to choose North Carolina?
The state’s tax climate supports business growth. North Carolina has the third-lowest business tax burden among all 50 U.S. states, according to a 2018 study by Anderson Economic Group based in East Lansing, Michigan.
Anderson’s 2018 State Business Tax Burden Rankings Report is uniquely comprehensive, collecting data on 11 different types of taxes including property, income, sales, excise, severance and more. “We performed an exhaustive review to estimate all taxes directly paid by businesses to state and local governments,” Anderson’s report says.
In 2018, the state also fully implemented single sales factor apportionment for multistate corporations. That means corporate income subject to state tax is now based solely on a company’s North Carolina sales rather than its property and payroll in the state. This further encourages corporate facility expansions and new hiring.
North Carolina is well-connected. Businesses in North Carolina are strategically located on the central East Coast, with excellent access to U.S. and global markets. The state is a nexus for 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. Over 150 million people are within a day’s drive of North Carolina.
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 has two Class I rail carriers Norfolk Southern and CSX.
In wrapping up the state’s business outlook, Chung stressed North Carolina’s “population and talent pool are among the fastest-growing in the country, and our state offers affordable business costs, a high quality of life and a workforce that can meet the needs of diverse employers.”
“Our pipeline of people includes those with advanced degrees and topnotch R&D skills, while also encompassing the largest manufacturing workforce in the Southeast at more than 460,000 and counting,” he added. “We will continue to be a top-performing state in business attraction.”
