AUSTIN, TEXAS (August 20, 2013)—Results of the latest bi-annual survey of economic developers by Avalanche Consulting conducted in July show that leads, prospect visits, and expansion prospects increased for economic development organizations (EDOs), but announcements and startups decreased.
“These are the chief economic officers for 160 cities and regions in the U.S., and they have their fingers on the pulse of what’s happening,” says Chris Engle, Avalanche Consulting’s Vice President. “They are talking to companies about whether they will grow and expand and economic developers continue to see steady improvements in prospect activity – which is an indicator of future job growth.”
The country appears to be splitting into two growth camps, with nearly 50 percent of economic developers saying prospects increased and 50 percent saying prospects decreased. Very few communities indicating activity has been flat/same. “This bifurcation in the economy, with some communities advancing and others stalling, is an indication that much of the country continues to feel the grips of the past recession,” says Engle.
Perceptions of the national economy have improved since our previous survey in January. Now, 34% of economic developers believe the economy is good – double January’s 17% – and for the first time since we began the survey (Q4-2009), positive perceptions outnumber negative perceptions. This more positive opinion of today’s economy continues into the future: 88% of economic developers believe that the economy will be the same or better in 6 months.
“Today’s positive perceptions of the national economy and the lack of negative expectations is a solid indication that the road to economic recovery has smoothed and will continue,” says Engle.
Negative opinions of federal policies have tempered somewhat – today, 62% still believe federal policies are currently poor, down from 73% in January 2013.
Definition of Prospect Activity
Prospects are companies that are considering an expansion/relocation and are competitively evaluating multiple cities as part of their decision. Economic development organizations often assist these companies with their information needs, site and building search, workforce assessments, and/or financing and incentives. Prospects are flagged as various types as they move through the decision process:
- Lead – A company makes an initial request for information or indicates that an expansion/relocation decision process has begun.
- Prospect – A formal “Request for Proposals” is usually sent, which includes the requirements for the project. Prospects can be Expansion Prospects or Relocation Prospects.
- Visit – A community is short-listed and company representatives visit multiple communities to gather and confirm information.
- Announcement – A company makes a decision and issues a public statement announcing the winning community for the company’s expansion/relocation.
Avalanche Consulting is one of the nation’s leading economic development consultancies specializing in economic and workforce development, strategic planning, target industry analysis, workforce demand assessments and marketing plans. Learn more at: www.AvalancheConsulting.com
The Economic Development Activity Index is a bi-annual survey of U.S. economic developers to gauge changes in prospect activity, job announcements, and perceptions of the economy. While other surveys exist to measure sentiment of businesses or consumers, this survey is focused on economic development leaders, who have unique insights on the future of job creation in U.S. communities. The most recent survey was conducted July 15 – August 1, 2013.