2012 expected to be ‘turnaround’ year for economic development in Richmond region
- February 15, 2012
So far, 2012 is looking to be a boom year in economic development for the Richmond region. Six months into fiscal 2012, seven companies have announced $154 million in new investment. Another 44 local businesses plan expansions, for a total of $200 million in corporate investments, the first time the region has seen that much activity since 2006, Greg Wingfield told a group of commercial realtors Wednesday.
Wingfield, president and CEO of the Greater Richmond Partnership (GRP), said he expects the year to be a “turnaround” year, based on deals the GRP has assisted with so far, including the decision by Amazon to build fulfillment centers in Chesterfield and Dinwiddie counties, a deal expected to bring $135 million in investment and 1,450 jobs.
That size deal with be the “new home run” the Richmond region can expect to see, Wingfield told the 70 people who attended a luncheon at The Boathouse at Rocketts Landing sponsored by the Richmond chapter of Commercial Real Estate Women.
Besides more mid-size deals, he shared other observational trends professionals are seeing in economic development. Fewer jobs are being announced with deals, he noted, and more jobs are 1099 or contract workers. “Twenty four percent of everyone working in America today is a worker with a 1099 form,” Wingfield said. “By 2020, that number is expected to be 40 percent.”
Drivers behind the trend include concern about health-care reform regulations. “Companies don’t want to add people to the payroll, because they’re concerned about the cost of health care.”
What Wingfield called “election-year paralysis” also tends to slow down company hiring and other spending commitments, he said. “They don’t want to move forward with a new relocation or business line until the issues around the election are resolved.”
Positive signs that will help get deals done this year in the Richmond region include:
• An improving residential real estate market, with sales increasing and prices starting to stabilize
• A falling unemployment rate. The latest figure for the Richmond MSA was 6.8 percent, compared to a national figure of 8.3 percent.
• Consumer confidence has been continuing to trend up since the holidays.
• Continuing low interest rates
Still, there are some concerns and red flags casting a pall over the economy, added Wingfield, including volatile oil prices and the recession in Europe.
In the meantime, though, the Richmond region can look to several strengths that are a source of hope and pride for economic developers, Wingfield said. The presence of the new Rolls-Royce aerospace manufacturing center in Prince George County brings a big name to a new sector the region can promote. Putting the Port of Richmond under the management of the Virginia Port Authority, Wingfield said, was a good move that will bring “marketing muscle,” to the river port, as a result of VPA’s connections around the world.
Rounding out his list was an alternative energy incubator in Hanover and the region’s network of colleges and universities.
New companies are looking for talent and a skilled work force. In fact, in response to a question from the audience, Wingfield said that one of the key reasons Amazon decided to come to Virginia — besides having access to a ready site near major interstates — was because studies had shown that about 40,000 unemployed or underemployed people live near the locations of two centers who have the skills to fill the jobs.
When recruiting for jobs and investments, Wingfield said the GRP concentrates on five sectors: advanced manufacturing, logistics, health care, finance, insurance and real estate, and the creative/technical fields. Richmond typically competes against these benchmark cities in the Southeast: Charlotte, Atlanta, Raleigh, Louisville, Ky., and Jacksonville, Fla.