WASHINGTON – South Carolina's recent success in attracting new manufacturers is due in part to government investments to prepare sites, build infrastructure and train the workforce, the state's chief recruiter told Congress Thursday.
"Our state is at the forefront of the manufacturing revival today," South Carolina Secretary of Commerce Bobby Hitt told members of a House Small Business subcommittee. "This sector continues to gain momentum."
Hitt said manufacturing accounts for 16.3 percent of the state's overall economy, well above the national level of 12 percent.
Thursday's hearing before the Subcommittee on Economic Growth, Tax and Capital Access, chaired by Rep. Tom Rice, R-Myrtle Beach, discussed two growing trends: American manufacturing companies returning some production back to the U.S., and foreign-owned companies setting up production here. Both counter the previous trend of off-shoring, which contributed to a decline in American manufacturing jobs from 19 million in 1979 to 12 million today, Rice said.
Witnesses cited concerns with an unpredictable federal regulatory environment, an unstable federal budget, a complex tax code and an education system that doesn't encourage manufacturing skills, but the hearing was generally upbeat about the country's re-emphasis on making products.
"The cited willingness of large companies to invest in new capital spending in the U.S. is improving, which is very positive for the manufacturing employment outlook," said Shirley Mills, a senior analyst with The Boston Company Asset Management.
Hitt, an appointee of Gov. Nikki Haley, focused his testimony on companies, large and small, that chose to locate and create jobs in South Carolina, starting with BMW 22 years ago. As textile jobs disappeared, the automotive and aerospace sectors have moved in. More than 45,000 people in South Carolina work in the auto sector.
Last year, overseas manufacturers made $981 million in capital investments in South Carolina to create 1,200 jobs, Hitt said. Almost half of the state's new investments each year come from foreign-owned companies.
Hitt said the local, state and federal governments, as well as public-private partnerships, have a role in attracting new manufacturing businesses.
For example, South Carolina offers financial assistance to counties for site development, the federal Community Development Block Grant program and the state's Rural Infrastructure Authority help pay for site improvements in lesser developed areas, and the state provides company-specific training and apprenticeship programs to develop skilled workers.
The state is also in the process of spending $2 billion to build and improve state-owned transportation infrastructure like port and railway facilities, Hitt said.
"We are preparing to be better and faster for our manufacturers in the future," HItt said. "And the states that do the best job at that will win."
The Bureau of Economic Analysis at the U.S. Commerce Department recently said South Carolina had the fastest-growing manufacturing economy in the Southeast.
The other member of Congress at the hearing, Rep. Judy Chu, D-Calif., warned that Congress itself could hurt the recovering manufacturing environment.
"The federal policy shift from domestic investment to deficit reduction... could have severe implications," Chu said. "We need to ensure federal funding for research and development is not left on the cutting room floor."