Despite the pandemic and its fallout, business in Georgia is thriving. Area Development and Site Selection magazines have ranked the Peach State “No. 1 for Business” for seven and eight years running, respectively. A 2021 CNBC survey ranked Georgia the No. 6 state in the nation for business, citing its superior infrastructure, economy and workforce and recently Georgia finished a close second to Texas in WalletHub’s survey of “2021′s best and worst states to start a business in.”
So what is Georgia doing right? After the state House and Senate adjourned around midnight on April 4, the Georgia Chamber thanked the legislative leadership for their economic growth and mobility focus and celebrated a “pro-business” 2022 legislative session. The Chamber noted that the bills sent to the governor represent a wide range of business topics, spanning the areas of economic development, education and workforce, health and wellness and transportation.
State legislative leaders have consistently adopted policies that foster a skilled workforce, reliable infrastructure, low taxes and high state credit ratings. This is why Georgia is home to 440 Fortune 500 companies and 18 have located their headquarters here.
Evidencing the state’s economic resilience is Georgia’s extraordinarily rapid recovery from the COVID-related economic issues that plagued most of the country over the past 2-plus years. In a December, 2021 address, Benjamin Ayers, Dean of the University of Georgia’s Terry College of Business, noted that the Georgia economy is on track to exceed its pre-pandemic peak and make a full recovery by the end of 2022, recovering faster than the national economy. He observed that, despite supply-side challenges, he expects the state to surpass its pre-pandemic jobs count later this year.
Manufacturing and heavy industry.
A major contributor to the state’s business success is advanced manufacturing, where Georgia leads the way nationally in a range of industries, including machinery, heavy equipment, electrical equipment and components and fabricated metals. Some 289,000 production workers produce an output of $59.5 billion.
A prime example of an industry that has thrived in the state’s pro-business environment is heavy equipment manufacturing. The industry in the U.S. has its epicenter in Georgia where major equipment manufacturers that have commenced and/or relocated operations include Caterpillar, Hitachi, Kubota, Komatsu, Sany, Textron and Yamaha.
The global heavy equipment market is worth approximately $200 billion, and is expected to exceed $230 billion by 2025, driven largely by global economic conditions and developments in the areas of mining, construction and oil and gas equipment.
While the heavy equipment industry is poised for explosive growth around the globe in response to economic and geopolitical developments, the industry maintains a strong presence in Georgia; a product of powerful structural advantages, including:
- A skilled labor force;
- Low unionization rates;
- Top-tier universities, including Georgia Tech and the University of Georgia as well as the highly rated Technical College System of Georgia;
- Superb manufacturing infrastructure and transportation, with access to world-class airports (specifically Atlanta’s Hartsfield-Jackson International Airport), ports, and railroad and trucking networks; and
- ·Significant tax breaks for manufacturers and job creators, augmented by a state R&D tax credit.
The world’s equipment manufacturers (including 6 of the world’s top 10) have identified Georgia as the new “Silicon Valley” of equipment manufacturing. As manufacturing expands, Georgia’s talent pool will continue to do so as well, becoming ever more capable (and valuable) in the process.
This, coupled with smart planning and policymaking by state and local officials, as well as tax incentives aimed at enhancing Georgia’s appeal to this enormously profitable industry, creates a confluence of opportunities for not only the equipment industry, but also for innumerable peripheral industries, and ultimately, for Georgia.
James R. Waite is a corporate and transaction attorney with more than 30 years of experience in the heavy equipment industry. He currently serves as counsel to Hitachi Construction Equipment Americas (HCMA), headquartered in Newnan.