Economic Development News
Business expansion activity accelerates in 2014
Excerpt from the Existing Business Annual Report
Published: Wednesday, April 15, 2015
By: Shaun Sappenfield
Expansion activity brings investment and creates jobs, but far too often the Chamber’s continuous efforts to facilitate existing business growth is overshadowed by the desire to attract that new business to our community. This craving is normal for the vast majority of communities, and the Chamber works aggressively to lure new jobs and investment on a daily basis as was evident by the recent attraction announcement of Continental Commercial Products, which will bring 150+ jobs to Jefferson City. But providing a balanced approach in economic development efforts is essential and must be looked at as a longer term commitment from both the community and business perspective. The old saying still holds true today, “The majority of job growth is produced by existing business.”
The Chamber’s existing business program continues to work closely with local employers to identify expansion opportunities for sustainable job growth. Existing business growth at several local companies added capital investment to our community in 2014 and our local economy saw ample increases in employment.
The Chamber’s existing business program, which focuses on the expansion and retention of existing businesses, worked directly with six local companies to assist in their growth plans. In total, six companies pledged to hire 162 net new employees and invest $77.6 million in their facilities. The investment is quite staggering with the majority of it coming by way of one employer, but the overall take-away is, “reinvestment leads to stability and longevity” for our community and employers. The estimated net new payroll associated with the proposed 162 new positions is $6.3 million dollars. As I’m constantly reminded by the effects of the post 2008 Great Recession, companies are focused on increasing efficiencies to drive down production costs, and decreases in employment are usually a direct result of improved efficiencies and cost cutting measures.
Since 2007, the Chamber existing business program has worked aggressively to facilitate opportunities for growth, focusing their efforts on projects that have a higher capacity to create multiple jobs, taxable real/personal private investment and lead to sustainable long-term economic benefits to the community. Within this time period, the Chamber has helped in the facilitation of 30 expansion projects by area manufacturers (some companies having multiple expansions) equating to just over 700 net new jobs, with a total payroll of plus $25 million (average wage per new job = $35,714).
All of this comes at a time when our community is digging out of a post-recession economy which has plagued the rest of the country. Couple this with increases in efficiencies seen in most every industry. Consider the following: one could argue the community has acquired seven new companies, each with 100 employees and a payroll of $3.57 million per. And, what is one of the major objectives that any economic development organization is measured by? – JOBS! And moreover, sustainable JOBS!
Job creation is a key factor to the progression of any community, but one should not be quick to overlook the importance of existing businesses and the here-and-now value they can provide.