High Prospect Activity Recorded in Automotive, Food Processing, Metal/Machining and Distribution
AUSTIN, TEXAS (March 3, 2015)— Economic development officials across the country reported increased economic development activity in 2014 and expressed confidence that 2015 will bring additional acceleration.
In the latest annual survey of economic developers conducted over a 4-week period in January-February 2015 by Avalanche Consulting, economic developers reported growth in prospect activity compared to the previous year. In 2014, more respondents from more communities saw an increase in all types of economic development activity. A majority of respondents cited higher increases in Leads, Prospects, Visits, Expansions, and Corporate Announcements over the previous year. Positive momentum is expected to continue during the next 12 months.
Broad gains in economic development activity were marked by varied activity levels by industry. 47% of respondents cited increases in Distribution & Warehousing prospect activity and 42% experienced increases in Food Processing. Both rates were the highest observed in 5 years. Other industries proved less resilient. Respondents reporting increased prospect activity in Energy and Mining/Extraction operations fell to five-year lows of 29% and 19%, respectively.
Sentiment toward federal economic policies continues to improve. 47% of respondents rated current federal economic policies as ‘poor.’ While still high, this represents the first time in the survey’s history that negative sentiment fell below 50%.
Confidence in the US economy has surged. Nearly 60% of respondents believe that the US economy will be ‘better’ or ‘much better’ one year from now, the highest observed level in 5 years. More than half of respondents also believe that their individual state and local economies will continue to improve in the years ahead. 65% of respondents anticipate that their local economies will be ‘better’ or ‘much better’ 12 months from now. 52% of respondents expressed similar sentiments about the state economies.
Definition of Prospect Activity
Prospects are companies that are considering an expansion or 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.
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.
The Economic Development Activity Index is an 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 January 14 – February 12, 2015. 175 communities responded to the 11th consecutive survey.