Alabama Succeeds in 2015 as a Top State for Investment
In 2015, many companies found prominent investment opportunities in Sweet Home Alabama.
According to a recent report from Ernst & Young, Alabama ranked 5th among states for mobile capital investment with a total contribution of $5.3 billion. This precise type of investment refers to expenditures of funds for projects such as office buildings, factories, call centers, and distribution centers, often geographically distant from a company’s headquarters. Alabama is ranked 4th when this figure is calculated as a percentage of state GDP. This is a remarkable ascent as the 2015 investment figure is double the state’s corresponding averages for the 2010 to 2014 period.
Specifically, a large portion of Alabama’s investment comes from a few concentrated and well-funded fields, including automotive manufacturing and aerospace. The state’s Department of Commerce has expressed a strong interest in continuing to focus on these high-profile sectors to increase the number of “knowledge-based jobs in fields such as research and development (R&D) and engineering.” In this same vein, Google announced intentions to construct a $600 million data center in Jackson County.
Another significant apportionment of funds comes from international sources in the form of foreign direct investment (FDI). Almost half of capital investment in 2015 originated in 18 countries, including Germany, Canada, South Korea, France, and Japan. Germany led this prestigious pack of FDI nations, with growth primarily driven by Mercedes’ $1.3 billion expansion in Tuscaloosa, located in western Alabama.
Alabama’s impressive performance in the national and global economic spheres is similar to that of many other southern states. Texas and Louisiana were the top two states in Ernst & Young’s mobile capital investment ranking. Because southern states offer competitive operating costs and concrete logistical infrastructure, they draw many foreign companies looking to expand into North America. Other appealing elements include ascending workforce development levels and the presence of state and local tax incentives. Because of these factors, states like Alabama often serve as preeminent indicators and can forecast upcoming trends in the global marketplace.
The overall takeaway from the investment advantage Alabama holds, according to a principal at Ernst & Young, is that “states should continue to find their competitive edge to attract a wide variety of investment types and maintain a healthy economy.”
Companies like Google and Mercedes are expanding and innovating through investment in new, driven ideas. They are taking advantage of the opportunities Alabama provides, including various tax credits for R&D. These credits offer advantages to forward- thinking companies in the form of cash-saving benefits.
If you would like to know more about how R&D tax credits function and how they can profit your firm in particular, Swanson Reed’s professionals are available for constructive discussions. Contact us today if you would like to know if your company qualifies.
