Foreign Investment into Tennessee 4th Quarter 2014
Tables and Graphs
Tennessee was very successful in attracting foreign investment last year.
IBM's Institute of Business Values ranked Tennessee first among the American states in its 2013 new foreign investment-related job commitments. That was going to be hard to top. Yet in 2014, the state's announced employment from new foreign investments was even higher. New or expanded foreign-owned operations led to 6,327 jobs (versus 4,607 in 2013). Sixteen foreign firms either initiated new operations or significantly expanded existing ones in 2014. Another (ArcelorMittal) reopened its Harriman operations. The total number of new investments was down slightly from 2013, from 20 to 16 (17 if we wish to include the ArcelorMittal reopening) but the dollar value of the investment, like the number of jobs, was significantly higher.
The expansion of the Volkswagen plant in Chattanooga was the single largest investment ($600 million), expected to produce about 2,000 new jobs. It was one of three new German investments last year. At over $200 million, the next-largest-valued investment was the Bridgestone headquarters relocation and expansion in Nashville, one of four new Japanese investments. The second-largest investment in terms of employment, however, was by the Korean-owned SL Tennessee. It announced last July it will employ 1,000 in its expanded Clinton operations. The accompanying map indicates the location and size of the year's foreign investments. As can be seen, the investments were concentrated in the Chattanooga and Knoxville areas along with middle Tennessee. Exactly half of the new investments were in automotive-related facilities (and to this we could add the Bridgestone investment).
Japan and Canada were the biggest sources of investing companies. No surprise there. Each accounted for four new investments. Germany, home of three investing companies, was the only other nation that was the source of more than one investment. We might note the $100 million Chinese Microport Orthopedics investment in Arlington. The global increase in outbound Chinese investment is certainly one of the bigger stories in the global economy, and we should expect to be seeing more such investments in Tennessee.
The annual dollar amount of announced investment can be volatile because of the impact of one or two very large investments in a given year. That happened in this state in 2009 when two billion-dollar-plus polycrystalline silicon investments occurred in the same year. But if we take into account these exceptional investments, the clear upward trend in foreign investment in Tennessee that we have seen in recent years continued in 2014. The dollar value of investment was up about $300 million over last year. The trend in employment growth also continued. Last year's new employment was more than a third higher than 2013 and three times that of 2010 or 2011. The rate of increase in employment stemming from foreign investment again exceeded the state's overall employment growth rate.
By just about anyone's accounting, Tennessee was very successful in attracting foreign investment last year. Once again, the bar for 2015 has been set pretty high.
