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Economy

Report ranks Alabama No. 1 in job creation from 2018 foreign investments

Eddie Burkhalter

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Alabama topped the nation in job creation from foreign investments during 2018, according to Gov. Kay Ivey’s office. 

The 2019 Global Location Trends report by IBM-Plant Location International won’t be publicly released until later this month, but Ivey’s office made the announcement in a press release Thursday

“Foreign investment has been an important driver of job creation in Alabama for many years, and it continues to generate significant new opportunities for communities and working families around the state,” Ivey said in the press release. “Our economic development team has worked tirelessly to strategically position Alabama for investment from around the world, and this ranking validates the team’s diligence.”

Other notable findings in this year’s report are: 

  • Alabama is the No. 1 state in the U.S. based on new job creation from foreign investments announced during 2018.
  • Alabama is also No. 1 for foreign investment job creation per million inhabitants in 2018.
  • Alabama ranks No. 7 among the states for job creation from foreign and domestic (state-to-state) investment together.
  • Alabama is No. 2 for job creation per million inhabitants from foreign and domestic investment combined.

IBM-Plant Location International provides site selection services to corporate clients and advises economic development organizations.

In 2018 Alabama saw $4.2 billion in foreign investments, the highest annual tally ever according to the governor’s office. According to the Alabama Department of Commerce companies from 16 different countries launched Alabama projects with more than 7,500 new jobs last year.

Hyundai Motor Manufacturing Alabama announced plans this week to invest an additional $292 million at its Montgomery plant, which brings Hyundai’s investments in Alabama to a total of $680 million over the past two years, according to the Montgomery Area Chamber of Commerce. 

Greg Canfield, secretary of the Alabama Department of Commerce, said foreign investment typically represents 30 to 50 percent of the total new capital investment from economic development projects in Alabama each year.

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“Foreign investment continues to invigorate Alabama’s economy and spark dynamic growth across many industry sectors, from automotive to aerospace and chemicals to forest products,” Canfield said. “It’s a priority for us as a state to continue to build on relationships we have formed with international companies and to make sure we are at the top of their list for new investment and job creation.”

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Economy

Report: 92 percent of small employers negatively impacted by coronavirus

Brandon Moseley

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Thursday, the National Federation of Independent Businesses said that 92 percent of small employers surveyed report that they have been negatively impacted by the forced economic shutdown to fight the spread of the coronavirus.

The NFIB Research Center’s latest survey on the current impact of the COVID-19 outbreak on small business shows continued deterioration of the small business sector. The severity of the outbreak and the regulatory measures that cities and states are taking to control it are having a devastating impact on small businesses.

92 percent of small employers are negatively impacted by the outbreak of the novel coronavirus. This is a marked increase from just ten days ago when 76 percent of small employers reported negative impacts to their businesses.

Only 3 percent reported that they are positively impacted. These firms are likely experiencing stronger sales due to a sharp rise in demand for certain products, goods, and services. Grocers, for example, are listed by government as essential businesses and are allowed to operate. With the closing of restaurants and all the schools means more people are eating their meals at home.

The NFIB believes that this will likely ease in the coming weeks as consumers feel more secure about their personal supply levels.

While State-specific data is unavailable, Alabama NFIB State Director Rosemary Elebash said, “Without a doubt, the coronavirus has taken a tremendous toll on Alabama’s small businesses. Our members are determined to get through this, and they’re working to apply for Paycheck Protection Program loans and other forms of financial relief so they can avoid layoffs and having to close the doors for good.”

Alabama Lt. Governor Will Ainsworth said, “We have organized an Emergency Small Business Task Force to identify problems our businesses are facing during this difficult time. We need to bring clarity to issues and government orders that are often confusing and to effectively communicate solutions and direct business owners to resources that can help. NFIB is an indispensable member helping to guide this task force.”

Nationwide, almost all small employers are now impacted by economic disruptions related to COVID-19. Just five percent of small businesses are not currently affected by the outbreak.

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Of these businesses, 44 percent anticipate that changing if the outbreak spreads to, or spreads more broadly in, their immediate area over the next three months.

Of the small businesses that were negatively impacted. 80 percent report slower sales, 31 percent report that they are experiencing supply chain disruptions, and 23 percent report concerns over sick employees.

Even President Donald J. Trump (R) has expressed concerns that the cure may be worse than the virus.

The big questions for the economy going forward is how long are these extreme measures going to last going forward and how long can small businesses continue to operate under the current conditions?

About half of small employers report that they can survive for no more than two months of this. About one-third said that they believe they can remain operational for 3 to 6 months.

Many small business owners are anxious to access financial support through the new small business loan program in the CARES Act to help alleviate some of the financial pressures building up.

Just 13 percent of small employers reported not as severely impacted and expect that they can remain open indefinitely.

Almost all small business owners are taking some sort of action in response to the outbreak by adjusting to changing economic conditions or protecting themselves from potential disruption.

Only 5 percent of owners have not taken any action in response to the outbreak. This is a marked departure from more than half (52%) that reported not taking action three weeks ago.

The actions taken by most small employers are those related to recommended CDC steps to protect and prevent the spread of COVID-19 in the workplace including talking to employees about hand washing and social distancing and disinfecting and cleaning offices and workplaces more frequently.

56 percent have scaled-down or adjusted business operations. 26 percent have delayed payments to their creditors.

The level of concern among small business owners about the coronavirus impacting their business has increased significantly over the past three weeks.

About 72 percent of small business owners surveyed reported being “very” concerned about its potential impact on their business now compared to just 16 percent on March 10th. 22 percent said that they are “somewhat concerned”. Only six percent surveyed said that are “slightly” concerned; while only one percent reported that they are not at all concerned.

Due to escalating financial stress on the small business sector, more small businesses are talking with their bank about financing needs than was the case 10 days ago. About 29% of small employers have talked with someone at their bank or with the Small Business Administration about finance options, and 23% are planning to do so soon. Another 38% of small employers have not, and do not, intend to do so.

The CARES Act includes new small business loans through the Paycheck Protection Program (PPP). Almost two-thirds of the small employers surveyed plan to apply for the loan. The PPP is another targeted loan assistance program to help small businesses weather the rapidly changing economic crisis.

The vast majority of small businesses are now impacted by the COVID-19 outbreak, and owners are taking the threat to their business seriously.

Many owners have already sought out financial help and more are planning to do so in the near future. The outbreak has left few, if any, owners unscathed. The economic impact is immense, and now, the questions are how long will this last and how quickly can the small business sector recover when this ends.

This survey was conducted with a random sampling of NFIB’s 300,000 members. The survey was conducted by email on March 30, 2020. NFIB collected 1,172 usable responses. The small employers surveyed have between one to as many as 465 employees.

As of press time, COVID-19 has killed 6,096 Americans. 228,875 Americans have been confirmed as having active cases. Of these 5,421 are in serious or critical condition. Dr. Anthony Fauci estimates that between 100,000 to 200,000 Americans will die if the public will practice the social distancing policies that the administration is recommending to combat the spread of the coronavirus strain that causes COVID-19, SARS-CoV-2.

The number of American deaths from COVID-19 has doubled since Sunday and has been doubling every three or four days for weeks. The White House Coronav-2irus Task Force has presented modeling showing over one million American dead over the coming months if we do not practice their social distancing recommendations.

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Economy

Fifty major American companies join effort to fight the coronavirus

Brandon Moseley

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Wednesday, the White House announced that fifty major American firms have answered the White House’s call to join the national war on the coronavirus.

“The private sector is responding to President Trump’s call to step up and help combat the coronavirus,” the White House said Tuesday.

Many of the companies are shifting their focus and even assembly lines to deliver needed supplies to the doctors, hospitals, and first responders against the COVID-19 global pandemic.

Most did so voluntarily and were not coerced by government or threatened with the Defense Production Act.

Major corporations including: Facebook; Anheuser-Busch; Ford; Fiat Chrysler; Toyota; GE Healthcare; 3M; Jockey; Hanes; Ralph; Lauren; GE Healthcare; General Motors; and My Pillow have all stepped up and are contributing to the COVID-19 war effort.

. “While by no means comprehensive, these are some notable examples of the private sector stepping up,” said an administration official.

The National Sheriffs’ Association have cited: Home Depot, Grainger, and Staples as well as a half-dozen national restaurant chains for their help.

Their pleas for help have been “enthusiastically welcomed” by some top corporations, said National Sheriffs’ Association Executive Director and CEO Jonathan Thompson. “What they are doing is more than impressive. It’s heartening,” he said.

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My Pillow has dedicated 75 percent of its production to the effort making PPE.

President Trump has highlighted the role that our corporate partners are playing in the COVID-19 effort during his daily coronavirus task force press conferences.

“With our great president, vice president and this administration and all the great people in this country praying daily, we will get through this and get back to a place that’s stronger and safer than ever,” said My Pillow founder and CEO Mike Lindell.

“Joining us this afternoon are CEOs of the great American companies that are fulfilling their patriotic duty by producing or donating medical equipment to help meet our most urgent needs,” Pres. Trump said on Monday. “What they’re doing is incredible. And these are great companies.”

Ford, 3M and GE Healthcare are making ventilators in a joint effort.

Toyota is using their facilities to produce face shields and collaborating with medical device companies to speed up manufacturing of vital medical devices.

General Motors is manufacturing respiratory masks and working with Ventec Life Systems to mass produce ventilators.

Fiat Chrysler is manufacturing and donating more than 1 million protective face masks a month.

Honeywell has doubled their production of N95 masks and intends to increase its capacity 500 percent over the next 90 days.

3M doubled their global output of N95 respirator masks and plans to make 100 million a month.

SpaceX is making hand sanitizer and face shields for local hospitals.

Lockheed Martin donated use of their corporate aircraft and vehicle fleet for medical supply delivery,

Boeing will print 3D face shields for healthcare workers and offer its Dreamlifter aircraft to help coronavirus response efforts.

Anheuser-Busch is working to produce hand sanitizer.

Bayer, Novartis, and Teva Pharmaceuticals donated millions of doses of hydroxychloroquine, an experimental treatment for COVID-19 that has shown some early promise.

·Johnson & Johnson has partnered with the Biomedical Advanced Research and Development Authority (BARDA) to commit more than $1 billion to co-fund vaccine research, development, and clinical testing.

Procter & Gamble is ramping up its production capacity for hand sanitizer, and is working to produce face masks.

Medtronic is increasing its production of ventilators.

Panera Bread is partnering with USDA to serve meals to children throughout Ohio.

Economic developer Dr. Nicole Jones said, “The private sector has the ability to move with incredible speed. Many companies already own the equipment that can produce various items and have tweaked processes to manufacture products our country needs. For example, clothing companies such as Ralph Lauren, Hanes, and Brooks Brothers are making gowns and masks. Ford and GE combined forces to produce ventilators. Alcoholic beverage companies repurposed what would be normally be discarded into hand sanitizers. All of these are examples of American workers’ willingness to step up at a critical time in United States and world history.”

(Original reporting by the Washington Examiner contributed to this report.)

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Congress

Alabama municipalities may be left out of $2 trillion stimulus package

Bill Britt

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As the largest economic stimulus in American history flows to states and municipalities around the nation, stipulations in the two-trillion dollar emergency fund may leave Alabama cities out altogether.

As enacted, the third stimulus bill, the CARE Act, directs funding for states, and local governments, the catch is that the act only allocates funds for municipalities with a population of 500,000 or more.

No city in Alabama has a population of 500,000, leaving an unanswered question as to who gets what and who gets nothing?

The state has 463 municipalities spread out over 67 counties. Not one has a population nearing half a million yet each one is experiencing the negative effects of the COVID-19 pandemic.

“We are working with Treasury and the Governor’s office to understand what municipalities can expect,” said Greg Cochran, deputy director of the Alabama League of Municipalities.

Alabama will receive $1.9 billion from the stimulus package, as a block grant, which could be allocated in a 55-45 split, according to the League’s estimation with around $1.04 billion to the state and $856 million going to local governments.

“Currently, there is little guidance on how those shared resources are to be distributed to local governments,” said Cochran. “Nor is there clear directive that those resources are to be shared with local governments with less than 500,000 populations.”

The National League of Cities is also seeking clarification from Treasury Department on these questions and guidelines to ensure funds are shared with local governments.

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“Congress is working on a fourth stimulus bill, and we are working diligently with our Congressional delegation, NLC and other stakeholders to have all cities and towns are recognized for federal funding assistance,” Cochran said.

However, on Tuesday, Senate Majority Leader Mitch McConnell cast doubt on a fourth package, saying that Speaker Nancy Pelosi’s needed to “stand down” on passing another rescue bill. “She needs to stand down on the notion that we’re going to go along with taking advantage of the crisis to do things that are unrelated to the crisis,” as reported by The Washington Post.

Alabama’s biggest cites, Birmingham, Montgomery, Huntsville, Mobile and Tuscaloosa, are already facing strain under the weight of the COVID-19 outbreak.

But so are smaller cities like Auburn, Hoover, Madison, Opelika and others. Lee County and Chambers County have far more cases of the virus per capita than the state’s more populous counties.

“I was not really happy with the way that they limited the money,” Jones said, adding that the money could go to counties with 500,000 or above. Jefferson County would qualify for that.

Jones also said he would like to see more money for city and county expenses not directly related to COVID-19 like fire and police. “We’re going to have to do what I think we can to backfill some of the expenses,” Jones said.

In addition to health and welfare concerns for residents during the COVID-19 calamity, cites are dealing with what is certain to be a downward spiral on tax revenue and other sources of income and a subsequent rise in costs. The U.S. Department of Labor reported Thursday that at least 90,000 people have applied for unemployment compensation in the state over the last two weeks.

“Knowing that our municipalities will experience a loss in revenue because they rely on sales, motor fuel and lodgings taxes, we are urging our state Legislature to be mindful of actions they take when they return regarding unfunded mandates/preemptions,” said Cochran. “Additionally, we are concerned about the adverse impact this could have on 2021 business licenses, which are based on sales from 2020.”

The combined population of the state’s two biggest cities, Birmingham and Montgomery, do not equal 500,000, the threshold for receiving funds under the Care Act.

Cochran says that the League is working tirelessly to find answers as to how local governments can participate in Congress’s emergency funding.

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Economy

More than 80,000 joined the unemployment rolls in Alabama last week

Chip Brownlee

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More than 80,000 people filed a jobless claim to receive unemployment compensation last week, the Alabama Department of Labor and the U.S. Department of Labor say. That number is about eight times the number of claims filed the week before when layoffs began hitting the state.

Alabama Department of Labor spokesperson Tara Hutchison said Monday that some 74,056 people filed an initial jobless claim during the week that ended March 28, according to the department’s preliminary data. That number was revised upward to 80,196 in a U.S. Department of Labor report released Thursday, April 2.

More than 40,000 filed during the first four days of the week last week, with the number jumping past 70,000 by the end of the week before being revised even further upward. The new numbers bring the two-week total to more than 90,000 in the state.

About 10,892 people filed initial claims during the week ending March 21, according to the U.S. Department of Labor’s data. That number was also revised upward. That was also a seven-fold increase compared to the week that ended March 14.

The number of people who filed a jobless claim last week is far more than at any point since at least 1987. The U.S. Department of Labor’s weekly unemployment claims data only goes back to 1987 for Alabama.

“In a sharp contrast to earlier recessions when the manufacturing sector leads, this time the service sector—accounting for 67% of the US economy—has seen quick and widespread declines,” said Hung Tran, a nonresident senior fellow in global business and economics at the Atlantic Council. “This probably will make the contraction deeper, quicker and take longer to recover.”

The Alabama Hospitality Association has estimated that some 225,000 hotel and restaurant workers will be laid off during the COVID-19 crisis.

The Economic Policy Institute’s conservative projections have estimated that nearly 200,000 people could lose their jobs in Alabama.

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“Current unemployment levels are not far-fetched given the fact that industries including retail, hospitality, and leisure have essentially been shut down overnight due to COVID-19,” said Alexis Crow, an economist at the Atlantic Council. “While some industry bodies’ claims may be undershot, and others somewhat overshot, it will be critically important to see how the US steps in to help workers maintain their jobs in order to create greater stability in the economy. How quickly industries ‘bounce back’ remains to be seen, but once the health crisis is contained, businesses in the hardest hit sectors are likely to return, outlasting those which had vulnerabilities prior to the corona crisis.”

The U.S. Department of Labor reported that more than 3.28 million people across the country filed unemployment claims during the week ending March 21. That shattered the Great Recession’s peak of 665,000 in March of 2009, according to CNBC. More than 6.6 million people across the country filed unemployment claims during the week ending March 28.

In Alabama, you can apply for unemployment by phone or online. There have been issues with people having trouble getting through on the telephone system. The state has said freelancers, independent contractors and gig economy workers can now begin filing.

So many unemployment claims have been filed since businesses began laying off people because of the COVID-19 pandemic that the Department of Labor has been having trouble accepting and processing the filings.

WSFA reported this week that some people have not been able to file.

To help alleviate the strain, the state has waived fees that are typically charged when an employer files for their employees.

To be eligible to file for unemployment insurance related to a COVID-19 layoff or firing, you must meet one of the following requirements:

  • Those who are quarantined by a medical professional or a government agency,
  • Those who are laid off or sent home without pay for an extended period by their employer due to COVID-19 concerns,
  • Those who are diagnosed with COVID-19,
  • Or, those who are caring for an immediate family member who is diagnosed with COVID-19.

Workers can file for benefits online at www.labor.alabama.gov or by calling 1-866-234-5382. Online filing is encouraged.

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