High Prospect Activity Recorded in July-Dec 2013 in Automotive, Building Materials, Energy, Food Processing, Metal/Machining, Distribution, Health Care, and Tech Services
AUSTIN, TEXAS (March 5, 2014)— Economic development officials across the country report higher expectations for 2014 as corporate announcements in the second half of 2013 increased over the previous half.
Results of the latest bi-annual survey of 214 economic developers by Avalanche Consulting conducted in January reveal that economic developers reported slightly slower growth in prospect activity overall, but announcement activity increased. Expansion prospect activity reported the greatest increase (see definitions below).
A diverse set of industries reported improvements in prospect activity. Manufacturing prospect activity growth was highest for Automotive, Building Materials, Energy, Food Processing, and Metal/Machining. Distribution/Warehousing activity experienced high growth, as did Health Care Services and Technology Services/Software.
Economic developers continue to hold positive perceptions of their local and state economies, though just 36% believe the U.S. economy is good or very good. A majority of economic developers (64%) still believe federal policies are currently poor, but this is down from 73% in January 2013.
“These are the chief economic officers for over 200 cities and regions in the U.S., and they have their fingers on the pulse of what’s happening,” said Chris Engle, Vice President of Avalanche Consulting. “They are talking to companies all the time about economic conditions and whether they will grow and expand.”
“When we asked economic developers how site selection requirements have changed for companies, Skilled Workforce Availability scored the highest, showing that it is more important today than two years ago,” Engle said. “Preparing a globally competitive, highly skilled workforce remains today’s greatest challenge for U.S. communities and the nation.”
When asked to provide their opinion on the Affordable Care Act’s impact on their communities’ businesses, economic developers responded overwhelmingly that the effect would be negative (nearly 80% of responses).
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 expansion/relocation.
- 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.