Corporate relocations and expansions slow in North Carolina
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Rendering of the Centene campus in University City in Charlotte. Credit: LS3P
The number of corporate relocations and expansions in North Carolina has slowed in the years since the pandemic, state economic data show.
Why it matters: North Carolina has a reputation for being good for business. That includes its ability to lure investment companies from outside the state — from Fujifilm Diosynth's announcement last week to spend $1.2 billion expanding its Wake County operations, to plans from the logistics management company TTX to move its corporate offices to Charlotte.
By the numbers: North Carolina had 111 corporate relocations or expansions in 2023, down from 151 in 2022, 174 in 2021 and 147 in 2020, according to annual reports from the Economic Development Partnership of North Carolina.
- 2021 was a year filled with massive announcements, including Toyota's plans for an electric vehicle battery plant in Liberty and Apple's vision for a $1 billion Research Triangle Park campus.
- 2022 saw a lot of activity due to federal legislation such as the CHIPS Act, EDPNC spokesperson Maggie Bizzell told Axios.
Yes, but: The EDPNC's annual figures don't capture the growing number of companies that have canceled expansion plans or reneged on incentive agreements.
- Raleigh tech startup Bandwidth withdrew from an incentive agreement earlier this year that would have required it to create more than 1,100 local jobs, for instance. Centene canceled plans for a $1 billion regional headquarters in Charlotte in 2022.
- Using incentives to bring a company to North Carolina has proven challenging at a time when many jobs are still being done remotely.
The big picture: The slowing of corporate relocations might not be a North Carolina problem per se, according to Gerald Cohen, chief economist at the Chapel Hill-based Kenan Institute.
- "Companies clearly invest less during periods of higher interest rates," Cohen said, adding that other macroeconomic factors, such as inflation, likely weigh on companies' decisions.
- Last year was "challenging for economic development across the country" due to those macroeconomic factors, Bizzell similarly noted. Companies have had to reevaluate their plans accordingly.
- Employers interested in North Carolina routinely point to factors such as climate, cost of living, airports and tax-friendly policies as significant draws. Those factors haven't changed, Cohen said.
Zoom out: Almost 500 companies relocated their U.S. headquarters between 2018 and 2023, according to a recent report from CBRE Group, a commercial real estate services and investment firm. The report only looked at relocations, not expansions.
Relocations nationwide peaked at 137 in 2021 and have trended down since then, the report shows — mirroring what's happened in North Carolina.
- Business climate/lower taxes is the top reason indicated for HQ relocations, per CBRE.
- "It is also possible that the bulk of desired HQ relocations simply occurred during the pandemic, satiating near-term demand," the CBRE report read.