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Table of Contents Executive Summary…………………………………………………………………………………………………………. Ϯ Economic Review of 2011 and Outlook for 2012……………………………………………………………… 3 The World Economy…………………………………………………………………………………………….. 3 The U.S. Economy………………………………………………………………………………………………… 4 The Georgia Economy………………………………………………………………………………………….. 7 The Camden Economy…………………………………………………………………………………………. 8 Project Overview……………………………………………………………………………………………………………. 11 Respondent Profile………………………………………………………………..………………………………………. 12 By Type of Industry…………………………………………………………………………………………….. 12 By Size of Firm…………………….…………………………………………………………..…………………. 13 Index of Economic Optimism…………………………………………………………………….………………..…. 14 Costs…………….….………….……………………………………………………………………………………………..…. 18 Sales and Profitability……………………………………………………………………………………………..……... 22 Employment Outlook………………………………………………………………………………………………….…. 26 Investment, Capacity & Productivity…………………………………………………..…………………….…... 32 Naval Submarine Base Kings Bay (NSBKB)……………………………………………………………………… 37 Desired Programs or Services………………………………………………………………………………………… 39 Economic Outlook for Camden County………………………………………………………………………….. 40 Directory of Services in Camden County………………………………………………………………………... 42 Federal and State Resources for Businesses in Camden County…………………………………….. 43 Partners and Sponsors…………………………………………………………………………………………………… 44 Authors and Acknowledgments……………………………………………………………………………….……. 47
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Executive Summary The 2011 Pulse of Camden is now the second business conditions study conducted in and for Camden County, including the cities of Kingsland, St. Marys, Woodbine, and several unincorporated communities within the county. Camden County is located in the extreme southeast corner of Georgia and is known for its rich history, natural scenic beauty, Southern hospitality, and the Naval Submarine Base Kings Bay – the only U.S. Naval installation in the State of Georgia. The Pulse of Camden study collected and analyzed empirical data, not anecdotes, from Camden’s organizational executives and small and medium-sized business owners. The empirical data consisted of the participants’ perspectives on local business conditions and was gathered from July 2011 through September 2011 via an on-line survey. The response rate was roughly ten percent, which is a typical response rate for a survey of this type. Key findings of the 2011 Pulse of Camden study are: Local Index of Economic Optimism: Less optimistic Input Costs in 2011/cost expectations for 2012: Increased/Increase Sales in 2010/2011 expectation: Decreased/About the same Profits in 2011/2012 expectation: Decreased/About the same Employment in 2011/2012 expectation: About the same/About the same Investment prospects: mixed Program or Service in Highest Demand: Marketing and Promotion The perception and sentiments of Camden businesses mirror those of businesses in Georgia and in the Nation. Nationwide, businesses are generally less optimistic than they were a year ago about their sales and profit prospects in the near term, as well as the near-term outlook for the economy as a whole. There are some positive signs, however. The Pulse of Camden study found an increase over last year in the percentage of Camden businesses that indicated they intend to make capital investments to increase capacity or productivity in the upcoming year. Nationwide, firms are increasing their investment in software and equipment, as well. Further, firms in Camden and the national as a whole are not finding the supply of credit to be a constraint on investment. The primary constraint, rather, is weakness in the economy. And there are positive initiatives developing within the community to respond to the economic crisis. These exciting new initiatives will be briefly presented in the Economic Outlook section of the report.
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Economic Review of 2011 and Outlook for 2012 As we enter the final quarter of 2011, Camden County finds itself in choppy economic waters. The international economy is weak, with Europe particularly precarious. The U.S. economy is stronger than the European economy, but not by much. Economic activity in Georgia is lagging slightly behind activity in the nation, while activity in Southeast Georgia is lagging slightly behind that in Georgia. Before turning our attention to Camden, let’s review current economic trends in the world, the nation, the state, and our region in turn.
The World Economy The world economy is growing, but the growth is weak and precarious. Economic growth in Europe has slowed considerably. Euro area real GDP grew at an annual rate of 0.7 percent in the second quarter; for all of 2011, real GDP growth will likely come in well below 2 percent. Growth has been hampered by the default of Greece and the heightened threat of default by Italy, Spain, Portugal, and Hungary (the threat of default by Ireland has diminished). Financial institutions, now at greater risk, have tightened credit conditions, while the austerity measures adopted by the debt-plagued countries have been a further drag on growth. The sovereign debt crisis even threatens the survival of Europe’s Economic and Monetary Union (EMU). Collapse of the EMU would be bad for Europe, bad for the U.S., and bad for the rest of the world. Countries are not like big companies, and the global economy is not like a huge competitive market. In the global economy, growth in one region contributes to growth in others; a weak European economy makes for a weaker U.S. economy. And recall that the primary reason for creating the EMU (and the Bretton Woods system before that) was not to promote economic growth but to discourage war in European. Japan continues to struggle from the effects of the March earthquake and Tsunami. Real GDP fell by 1.3 percent in the second quarter and will likely be down for the year. The disaster’s disruption of Japanese exports continues to hobble some U.S. and foreign manufacturers. China and India, followed by Brazil, Argentina, and Chile, are the world’s economic bright spots. Annual real GDP growth in China and India is ranging between 8 and 9 percent, while growth in the three South American countries is ranging between 4 and 7 percent. Accelerating inflation in China and India may induce tighter monetary policy, tighter credit conditions, and slower growth in the months ahead, however. Indeed, the yield curve for Chinese government bonds is already inverted.
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Country Numbers
U.S. Canada Mexico Brazil China Japan Germany Euro Area
Real Gross Domestic Product Qtr.~ 2011* 1.3 2.3 3.9 2.9 4.5 4.2 5.4 4.0 9.1 9.0 -1.3 -0.6 0.5 3.3 0.7 1.9
Consumer Price Inflation 2011* 2.9 2.8 3.5 6.6 5.3 0.3 2.5 2.7
Unemployment Rate latest 9.1 7.2 5.4 6.2 6.1 4.6 7.0 9.9
Interest Rates, government bonds, latest 3- month 10-year 0.14 2.21 0.86 2.43 4.09 5.92 12.42 6.16 5.43 4.00 0.15 1.02 1.54 2.18 1.54 2.17
~ % change from previous quarter, annual rate * projected annual rate
The U.S. Economy According to the National Bureau of Economic Research, the “Great Recession,� which began in December 2007, ended in June 2009. This dating is sound. Consider the graphic of U.S. Real GDP below. % change in Real GDP 6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0 -8.0 -10.0
Source: U.S. Bureau of Economic Analysis
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A recession is an extended period of decreasing aggregate economic activity. When economic activity hits a trough and turns up, the recession is over and recovery has begun. Most aggregate data show the U.S. recovery beginning in July 2009. After falling precipitously in the second half of 2008 and the first half of 2009, real GDP increased in the third quarter of 2009 and has increased in every quarter since. Industrial production has followed a similar pattern, as has capacity utilization and a variety of other measures of economic activity. Index of Industrial Production 105.0 100.0 95.0 90.0 85.0 80.0 75.0
Source: Federal Reserve System
The labor market has followed a less favorable pattern. According to the Bureau of Labor Statistics, payroll employment fell each month from January 2008 through February 2010, amounting to a total decrease in employment of 8.8 million. Payroll employment has increased since February 2010, but by less than 2 million. The recovery stalled in the first half of 2011. After growing at a 3.0 percent clip in 2010, real GDP slogged ahead at a 0.4 percent annual rate in the first quarter and a 1.0 percent rate in the second quarter of 2011. Severe weather in winter and supply disruptions from the earthquake and tsunami in Japan in spring contributed to the stall, as did the political fracas over the debtceiling. Many businesses, investors, governments, and individuals worldwide found it unnerving that the world’s greatest deliberative body contains a significant number of representatives who, rather than deliberate and compromise, would prefer to allow the United
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States government to default on its debt. Some equanimity has returned, but damage was done, and the matter is far from being resolved. The most obvious symptom of the recession and weak recovery is the sharp decrease in investment. With the exception of government investment and private investment in software and equipment, investment spending remains depressed. Total private domestic investment is currently 20 percent below its 2005 level, while residential investment is almost 60 percent below its 2005 level. Real Gross Investment, Quantity Indexes 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 2005
2006
2007
2008
2009
Total Private
Nonresidential Structures
Residential
Government
2010
Equipment and Software
Source: U.S. Bureau of Economic Analysis
U.S. Numbers Real GDP (billions $) Inflation (GDP deflator) Payroll Employment(thousands) Unemployment Rate Industrial Production Index Capacity Utilization Money Supply (M1, billions $)
2010 $13,088 1.2 129,818 9.6 90.1 74.5 $1,740
2011:Q1 $13,228 2.4 130,757 8.9 92.8 76.8 $1,870
2011:Q2 $13,261 2.5 131,073 9.1 93.0 76.7 $1,924
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The Georgia Economy The recent recession was more severe in Georgia than in the nation as a whole. Between 2007 and 2009, U.S. real GDP fell by 3.8 percent; over the same time, Georgia real GDP fell by 5.7 percent. Consequently, while national real GDP has almost recovered from its pre-recession level, Georgia’s real GDP of $362 billion in 2010 is still less than the state’s real GDP in 2005. To make matters worse, economic recovery in Georgia is lagging behind the national recovery. In 2010, real output in Georgia increased by 1.4 percent, a rate that was well below the U.S. growth rate of 2.6 percent and ranked Georgia among the ten slowest growing states in the nation, as shown in the graphic below.
As can be seen above, growth in Georgia and Florida is lagging well behind that in most other southeastern states. While much of the lag is related to the real estate market bust, some may also be attributable to relatively weaker incentives for business and industry to relocate to Georgia.
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The Camden Economy For at least the past two decades, the Camden economy has been sound, strong, and resilient. The population of Camden County has grown steadily, from about 30,000 in 1990 to 50,500 today.
Camden Population 60,000 50,000 40,000 30,000 20,000 10,000 1990
1995
2000
2005
2010
Source: Georgia Department of Labor
Camden’s per capita income has also grown steadily over the years. Camden Per Capita Income $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $1990
1995
Source: Georgia Department of Labor
2000
2005
2009
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Especially for its size, Camden is a diversified local economy. The private sector accounts for 66 percent of Camden’s civilian employment, while the public sector accounts for 34 percent. Retail trade accounts for 22 percent of businesses and 13 percent of employment in the county, accommodation and food services accounts for 12 percent of businesses and 12 percent of employment, while goods-producing firms account for 13 percent of businesses and 9 percent of employment. The Naval Submarine Base Kings Bay provides Camden with a stable economic anchor. A more direct measure of the strength of an economy is its unemployment rate. Camden’s unemployment rate has been consistently below the national and state unemployment rates.
Unemployment Rates 12 10 8 Camden
6
Georgia U.S.
4 2
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
0
Source: U.S. Department of Labor, Georgia Department of Labor
Despite Camden’s record of economic growth and diversity, the county has been far from immune to the Great Recession. One illustration of the severity of the 2007-09 recession and subsequent weak recovery is the recent course of the Camden County economy. The Camden economy is now following the same pattern as the economy of Georgia. Conditions seemed to improve in the first quarter of 2011: Camden’s unemployment rate fell from 9.8 percent in January to 9.0 percent in April. But whatever recovery there was quickly evaporated: by June Camden’s unemployment rate had jumped back up to 10.1 percent.
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Other economic indicators are not as dismal. Retails sales, as gauged by SPLOST collections, were the same in the first eight months of 2011 as they were in the first eight months of 2010, while residential construction showed some improvement: though the same number of building permits were issued in the first half of 2011 as in the first half of 2010, expenditure on residential construction jumped 56 percent. Quarterly initial claims for unemployment insurance have also decreased for four consecutive quarters, while the labor force and employment are beginning to increase.
Initial Claims for Unemployment Insurance - Camden 800 700 600 500 400 300 200 100 0 2010:1
2010:2
2010:3
2010:4
2011:1
2011:2
Source: Georgia Department of Labor
Camden Numbers Population Annual Personal Income Median Household Income Labor force Employment Unemployment Unemployment rate Initial UI Claims
50,513 $1,464, 733,000 $49,581 19,942 17,910 2,032 10.2 190
Date for Statistic 2010 2009 2009 August 2011 August 2011 August 2011 August 2011 August 2011
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Pulse of Camden: Project Overview Brief Description The Pulse of Camden is a study conducted to inform and support businesses in Camden County. The objective of the project is to empirically capture the perceptions of local business leaders regarding past, current, and future business conditions and economic trends in Camden County. The aggregated results of the study can assist local businesses betterunderstand how their peers and customers perceive the business environment and thus be a tool for planning. The results can also be used to develop trend data and to enhance our understanding of the local economy.
Sampling More than 1,500 licensed businesses operate in Camden County. A total of 116 members of the Camden business community participated in the Pulse of Camden study.
Response The responses are categorized in two ways: by type of industry and by size of firm. The industry classifications are manufacturing, retail, hospitality, professional services, trades, and other industry. Firm size is measured by the number of full-time employees (FTEs), with categories of 1 FTE, 2-5 FTEs, 6-20 FTEs, 21-49 FTEs, 50-100 FTEs, and > 100 FTEs. The survey questions are organized into seven topic categories. Each topic category describes a crucial component of business conditions and is of special interest to Camden business owners and managers. The seven topic categories are:
Economy Cost of Goods Sold Sales and Profitability Employment Outlook Investment, Capacity, and Productivity Naval Submarine Base Kings Bay Programs and Services Needed
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Respondent Profile A total of 116 members of the Camden business community responded to the on-line Pulse of Camden survey. The respondents constitute a nice cross section of the local business community, representing both major industry types and as well as a range of firm sizes.
Respondents by Type of Industry The greatest number of survey respondents was from professional service firms.
Type of Industry Manufacturing Retail Hospitality Professional Services Trades Other
Response Percent 6.0% 11.2% 6.0% 39.7% 5.2% 31.9%
Response count 7 13 7 46 6 37
Percentage of Respondents by Type of Industry Manufacturing 6%
Other 32%
Trades 5%
Retail 11% Hospitality 6%
Professional Services 40%
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Respondents by Size of Firm In this year’s Pulse of Camden survey, 90 percent of respondents represented small to medium sized businesses. This percentage is by no means unique to Camden County or even local economies of roughly Camden’s size. U.S. Census Bureau data indicate that 89 percent of business firms in the United States have fewer than 20 full-time employees, while less than two percent have more than 100 employees. In Georgia, 87 percent of business firms employ less than 20 full-time workers, while 4.6 percent employ 100 or more full-time workers. The business landscape of Camden County, as well as that of Georgia and the U.S., is dominated by small and medium sized firms.
Size of Firm Greater than 100 f/t employees 50-100 f/t employees 21-49 f/t employees 6-20 f/t employees 2-5 f/t employees 1 f/t employee
Response Percent 6.9% 2.6% 8.6% 24.1% 31.9% 25.9%
Response Count 8 3 10 28 37 30
Percentage of Respondents by Size of Firm
7% 26%
2% Greater than 100 f/t employees 9%
50-100 f/t employees 21-49 f/t employees 6-20 f/t employees 24% 2-5 f/t employees
32%
1 f/t employee
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The Pulse of Camden Index of Economic Optimism The Pulse of Camden Index of Economic Optimism reflects how optimistic Camden business people are about the prospects for their local economy over the next year. The index is simply the difference between the percentage of survey respondents who think the local economy will be stronger in 2012 than in 2011 and the percentage of survey respondents who think the local economy will be weaker in 2012 than in 2011. The survey question and results are:
Survey question: Are you more or less optimistic about the outlook of the Local Economy next year (2012) compared to this year (2011)? Response More optimistic No change Less optimistic Uncertain
Response Percent 21.6% 23.4% 44.1% 10.8%
Response Count 24 26 49 12
Economic Expectations
Uncertain 11% More Optimistic 22%
Less optimistic 44%
No change 23%
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Almost 22 percent of respondents indicated they are more optimistic about the prospects of the Camden economy in 2012 compared with 2011, while 44 percent indicated they are less optimistic. Of the remaining respondents, 23 percent indicated they are neither more nor less optimistic, while 11 percent indicated they are uncertain about Camden’s economic prospects next year. Thus, with 21.6 percent of respondents indicating they are more optimistic about the Camden economy in 2012 compared with 2011 and 44.1 percent indicating they are less optimistic, the 2012 Index of Economic Optimism is -22.5 (21.6 - 44.1). Last year’s Pulse of Camden study recorded an Index of Economic Optimism of +9 (33.0% more optimistic – 24.0% less optimistic).
Pulse of Camden 2012 Index of Economic Optimism: -22.5 2011 Index of Economic Optimism: +9
The decrease in economic optimism in Camden is hardly surprising. An Index of Economic Optimism of 9 is fairly high, meaning that in 2010 Camden business people were optimistic, and to a significant degree, that local economic conditions would improve in 2011. Those expectations were disappointed. When expectations are disappointed, they change. The decrease in economic optimism is hardly unique to Camden County; optimism and confidence have been falling nationwide. The National Federation of Independent Business (NFIB) constructs a Small Business Optimism Index from the results of a monthly survey administered to small and independent businesses across the U.S. each month. In 2010, the NFIB Small Business Optimism Index increased from 89.3 in January to 92.6 by the end of the year – an increase comparable to an Index of Economic Optimism for Camden County of +9. In 2011, the NFIB Index has fallen each month since February. The index reached 94.5 in February; by August (the most recent figure) it was down to 88.1.
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NFIB Small Business Optimism Index, 2011 96
94
92
90
88
86
84 January
February
March
April
May
June
July
August
Source: National Federation of Independent Business
Though many factors are contributing to the decrease in optimism reflected in the most recent NFIB Small Business Optimism Index and our own Pulse of Camden Index of Economic Optimism, one is particularly important to note. Both the Pulse of Camden survey and the most recent NFIB survey were administered during the heat of the Washington debt-ceiling fiasco. This, without a doubt, depressed business optimism. The Camden and U.S. business communities have not been the only groups of people to suffer diminished optimism in the economy. U.S. consumers also lost some optimism and confidence in economic prospects. The University of Michigan’s Index of Consumer Expectations, which is one of the ten measures that make up the Conference Board’s Index of Leading Economic Indicators, has fallen precipitously in 2011. In January of this year, the Index of Consumer Expectations was 69.3 in January; in September it was 49.4, a drop of 18.9 percent.
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Index of Consumer Expectations, 2011 80.0
70.0
60.0
50.0
40.0
30.0
Source: University of Michigan Surveys of Consumers
Many factors have been weighing on consumer expectations in recent months: a persistently high unemployment rate, less than stellar job creation, the difficulty of reducing debt loads when real incomes are stagnant, and the list goes on. But the debt-ceiling fiasco has taken a major toll on consumer expectations in recent months. From the August 26, 2011 University of Michigan Surveys of Consumers press release: “Consumers have shifted from being optimistic about the potential impact of monetary and fiscal policies to a sense of despair and pessimism about the role of government. Never before in the history of the surveys have so many consumers spontaneously mentioned negative aspects of the government’s role in the economy, and never before have consumers rated economic policies so unfavorably.� The same shift likely applies to Camden consumers, as well.
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Costs Survey question: During this year, the AVERAGE PRICES your firm has paid for goods and services have‌
Response
Response Percent 76.6% 11.7% 5.4% 6.3%
Increased Remained unchanged Decreased Uncertain/Not applicable
Response Count 85 13 6 7
Almost 77 percent of respondents in the Camden County region indicated that the average prices their firm has paid for inputs to production have increased, while only 5 percent reported input price decreases. This is remarkably close to what last year’s Pulse of Camden respondents expected would happen to input prices: 67 percent expected input prices to be higher in 2011, while no respondents expected input prices to be lower.
Uncertain/Not applicable 6%
Reported Change in Input Prices , 2011 Decreased 5% Remained unchanged 12%
Increased 77%
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Survey question: Compared to this year, the AVERAGE PRICES your firm will pay for goods and services NEXT year will‌
Response
Response Percent 69.4% 17.1% 2.7% 10.8%
Increase Remain unchanged Decrease Uncertain/Not applicable
Response Count 77 19 3 12
The responses to this question are quite similar to the responses of the previous question. Most Camden businesses paid higher prices for inputs in 2011, and most expect the upward trend in input prices to increase.
Expected Change in Input Prices, 2012
Uncertain/not applicable 11% Decrease 3%
Remain unchanged 17%
Increase 69%
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Survey question: Compared to last year, your firm’s HEALTH CARE COSTS are‌
Response Higher About the same Lower
Response Percent 60.4% 37.8% 1.8%
Response Count 67 42 2
Most Camden respondents reported an increase in health care costs, which is hardly a surprise. However, a larger percentage reported increases in other input prices (see page 18) than reported increases in health care costs.
Change in Health Care Costs Lower 2%
About the same 38% Higher 60%
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The input price perceptions and expectations of Camden businesses are right in line with national input price data. The Bureau of Labor Statistics’ Producer Price Index (PPI) – an index based on the prices of goods and services that businesses buy – has not only increased over the past year, the rate of increase itself has been on the rise. The graphic below shows the 12month percentage change in the overall PPI for the past 13 months. PPI, Finished goods, 12-month percent change 6.5
3.9
4.2 3.3
3.2
Aug '10 Sep
Oct
Nov
3.8
3.7
Dec
Jan
5.6
5.6
Feb
Mar
Apr
7.0
7.0
7.2
May
Jun
Jul
6.5
Aug '11
Source: Bureau of Labor Statistics
Prices of commodities purchased by firms have been increasing at an even greater rate than prices of finished goods, as shown below. PPI, Commodities, 12-month percent change 10.1 8.2 6.2
6.5
Aug '10 Sep
Oct
5.7
5.8
Nov
Source: Bureau of Labor Statistics
6.5
Dec
10.5
11.2
11.1 9.9
8.7
5.9
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug '11
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Sales and Profitability Survey question: On AVERAGE, compared to this year, how do you expect to adjust YOUR FIRM’S PRICING on goods and services NEXT year?
Response Increase them They’ll remain the same Decrease them Uncertain/Not applicable
Response Percent 28.0% 45.8% 6.5% 19.6%
Response Count 30 49 7 21
Almost half of respondents do not expect to raise their prices in 2012. Almost 30 percent expect to raise their prices next year, while less than 10 percent expect to decrease them.
Expected Adjustments to Prices of Goods and Services in 2012 Uncertain/Not applicable 20%
Increase them 28%
Decrease them 6%
They'll remain unchanged 46%
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Survey question: Please indicate the level of your organization’s SALES and PROFITS.
Level of Sales and Profits Compared to last year, your firm’s SALES for THIS YEAR are… Compared to this year, your firm’s SALES for NEXT YEAR are expected to be… Compared to last year, your firm’s PROFITS for THIS YEAR are… Compared to this year, your firm’s PROFITS for NEXT YEAR are expected to be…
Higher
About the same
Lower
Much lower
1.9% (2)
23.4% (25)
21.5% (23)
33.6% (36)
8.4% (9)
Uncertain / Not applicable 11.2% (12)
4.7% (5)
23.4% (25)
43.0% (46)
10.3% (11)
2.8% (3)
15.9% (17)
0.9% (1)
19.6% (21)
26.2% (28)
30.8% (33)
13.1% (14)
9.3% (10)
2.8% (3)
20.6% (22)
41.1% (44)
15.0% (16)
4.7% (5)
15.9% (17)
Much higher
Some firms thrive even in a weak economy. Of this year’s Pulse of Camden respondents, 25 percent had higher or much higher sales in 2011 than in 2010, while 20 percent had higher or much higher profits in 2011 than in 2010. As we would expect, however, a larger percentage of Camden businesses reported decreases in sales (42 percent) and profits (44 percent) in 2011 from 2010. Considering the increases in input prices that Camden businesses encountered this year (see again pages 18, 20, and 21 of this report), it is surprising that more Camden firms did not report decreases in profits. How did 2011 sales and profits for Camden businesses stack up against the sales and profits that Camden businesses expected? In last year’s Pulse of Camden study, Camden business people were asked the same questions as above. The results were:
Expectations for 2011 SALES (compared to 2010) PROFITS (compared to 2010)
Much higher 2.2% 2.2%
Higher
About the same
Lower
Much lower
27.9% 20.1%
41.3% 41.9%
12.8% 18.4%
0.6% 2.8%
Uncertain / Not applicable 15.1% 14.5%
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The difference between expected sales and profits for 2011 and actual sales and profits in 2011 makes the decrease in economic optimism reported on pages 15 and 16 of this report quite understandable. In 2010, only 13 percent of Pulse of Camden respondents expected their sales to decrease in 2011 and only 20 percent of respondents expected their profits to decrease. Actual sales and profits, however, turned out worse than expected: again, this year’s Pulse of Camden study indicates that 42 percent of Camden businesses had decreased sales in 2011 while 44 percent had decreased profits in 2011. Unfortunately, the profit trend for Camden businesses appears to differ from that of the U.S. as a whole. This is most likely due to the greater concentration of small firms in Camden, as well as the greater concentration of firms in real estate, construction, and retail trade. For the U.S., the income of non-corporate businesses, or proprietors’ income, increased by 2.3 percent in the first half of 2011, and is up 12.7 percent since the first quarter of 2010 and 19.4 percent since its recession low in the second quarter of 2009.
Proprietors' Income (billions of dollars) $1,150 $1,100 $1,050 $1,000 $950 $900 $850 $800
Source: U.S. Bureau of Economic Analysis
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Corporate profits in the U.S. have all but gone through the roof. After-tax corporate profits rose to an all-time high of $1,517.1 billion in the second quarter of 2011. After-tax corporate profits have increased by 51 percent since the first quarter of 2008 and by 103 percent since their recession low in the fourth quarter of 2008. In the first half of 2011, after-tax corporate profits have risen by 4.4 percent.
After-tax Corporate Profits (billions of dollars) $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600
Source: U.S. Bureau of Economic Analysis
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Employment Outlook Employment in Camden County is distributed across a wide range of industries. The individual sectors that provide the most employment are the federal government and local government. The leading private sector employers are the retail trade and hospitality and food service sectors. First Quarter, 2011 Industry Construction Manufacturing Wholesale Trade Retail Trade Finance, Insurance, and Real Estate Professional, Scientific, and Technical Services Business Services Health Care Hospitality and Food Service Federal Government Local Government
Civilian Employment 353 776 313 1,717 936 942 638 933 1,562 2,205 2,255
Source: Georgia Department of Labor
Survey question: Compared to last year, your firm’s EMPLOYMENT level THIS Year is‌
Response Higher About the same Lower Uncertain/Not applicable
Response Percent 9.6% 61.5% 22.1% 6.7%
Response Count 10 64 23 7
More than six out of ten Camden businesses indicated that their current employment level is about the same as their employment level in 2010. Of the firms that changed their employment level, firms that reduced employment outnumbered firms that increased employment by more than two to one.
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Uncertain/Not applicable 7%
2011 Employment Compared to 2010 Employment
Lower 22%
Higher 10%
About the same 61%
These results are consistent with recent labor market statistics compiled by the Georgia Department of Labor.
August 2011 August 2010
Labor Force
Employment
Unemployment
19,942 19,858
17,910 17,850
2,032 2,008
Unemployment Rate 10.2 10.1
Source: Georgia Department of Labor
Survey question: Compared to this year, your firm’s EMPLOYMENT level NEXT YEAR is expected to be‌ Response Higher About the same Lower Uncertain/Not applicable
Response Percent 9.6% 73.1% 6.7% 10.6%
Response Count 10 76 7 11
Only one out of ten Camden businesses expects to increase its employment level in 2012.
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Uncertain/Not applicable 10% Lower
Expected Employment Change in 2012
7%
Higher 10%
About the same 73%
A crucial element of the any labor market is the prices of labor. Average weekly wages of the leading employment sectors in Camden County are shown below. Adjusting for inflation and seasonal factors, the trend in average weekly wages in Camden, at least through the first quarter, is flat. First Quarter, 2011 Industry Construction Manufacturing Wholesale Trade Retail Trade Finance, Insurance, and Real Estate Professional, Scientific, and Technical Services Business Services Health Care Hospitality and Food Service Federal Government Local Government Source: Georgia Department of Labor
Average Weekly Wages $691 $1,140 $849 $424 $573 $975 $681 $674 $250 $1,074 $657
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Survey question: Compared to last year, your firm’s LABOR COSTS (wages per hour) for THIS YEAR…
Response Increased Decreased Remained unchanged Uncertain/Not applicable
Response Percent 30.8% 12.5% 48.1% 8.7%
Response Count 32 13 50 9
Almost half of Pulse of Camden respondents indicated that their firms’ wage rates remained unchanged in 2011 from 2010. Of the Camden businesses that changed their wage rates, more than twice as many increased wage rates than decreased wage rates.
Uncertain/not applicable 9%
2011 Wage Rates Compared to 2010 Wage Rates
Increased 31%
Remained unchanged 48%
Decreased 12%
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Survey question: Compared to this year, your firm’s LABOR COSTS (wages per hour) for NEXT YEAR are expected to‌
Response
Response Percent 34.6% 2.9% 50.0% 12.5%
Increase Decrease Remain unchanged Uncertain/Not applicable
Response Count 36 3 52 13
The responses to this question are remarkably similar to the previous question, which means that Camden businesses expect the wage trend in 2011 to continue through 2012.
Expected Wage Rate Changes in 2012
Uncertain/Not applicable 12%
Increase 35%
Remain unchanged 50%
Decrease 3%
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Survey question: In general, your firm finds the QUALITY OF THE LOCAL LABOR FORCE to be…
Response Good Satisfactory Unsatisfactory
Response Percent 31.7% 51.9% 16.3%
Response Count 33 54 17
Hugely important to the success of any economy is the quality of its labor force. Camden businesses indicated that, on the whole, they are satisfied with the quality of the local labor force. Almost 84 percent of respondents rated the quality of the Camden labor force as good or satisfactory. However, the 2011 Pulse of Camden asked the following open question:
Survey question: The greatest workforce challenge facing your business is… The question naturally received a wide variety of responses from Camden businesses, but the most common type of response expressed concern with a lack of quality in the local labor force. The most common specific responses were:
Lack of skilled workers Lack of college educated workers Poor work ethic, especially among young workers Being able to retain good workers Meeting payroll in a bad economy
The responses to the two questions above are not necessarily inconsistent. The majority of Camden businesses may well be satisfied with the quality of the local labor force. Other Camden businesses, however, are not, and for those businesses, the difficulty of finding workers with the skills necessary for the job is their greatest workforce challenge. The use of Georgia Work Ready assessments would likely alleviate some of that difficulty.
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Investment, Capacity & Productivity Survey question: Is this a good time or a bad time to invest in PLANT, PROPERTY and/or EQUIPMENT?
Response Good time to invest Bad time to invest Uncertain/Not applicable
Response Percentage 36.9% 39.8% 23.3%
Response Count 38 41 24
Camden business owners are about evenly split in their view of whether this is a good time or a bad time to invest in plant, property, and equipment.
Good or Bad Time to Invest?
Uncertain/Not applicable
23%
Bad time to invest
40%
Good time to invest
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
The weak recovery and pessimistic expectations for the near economic future are likely weighing heavily on the investment decisions of local business owners.
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Survey question: During this year has your firm made one or more CAPITAL EXPENDITURES to MAINTAIN or INCREASE its capacity or productivity?
Response
Response Percent 58.3% 32.0% 9.7%
Yes No Uncertain/Not applicable
Response Count 60 33 10
Camden businesses that made one or more capital expenditures to increase capacity or productivity outnumbered Camden businesses that did not by almost two to one this year. That is a significant increase over last year, when 38 percent of Pulse of Camden respondents indicated they made a significant capital expenditure while 53 percent indicated they did not.
Camden Firms Making Capital Expenditures in 2011
Uncertain/Not applicable
10%
No
32%
Yes
58%
0%
10%
20%
30%
40%
50%
60%
70%
This is a positive sign made even more positive given last years’ expectations. In the 2010 Pulse of Camden study, 34 percent of Camden firms expected to make significant capital expenditures in 2011, while 45 percent or Camden firms did not expect to do so.
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Survey question: NEXT YEAR, do you expect your firm to make one or more CAPITAL EXPENDITURES to MAINTAIN or INCREASE its capacity or productivity?
Response
Response Percent 48.5% 32.0% 19.4%
Yes No Uncertain/Not applicable
Response Count 50 33 20
Another positive sign: almost half of Pulse of Camden respondents indicated their firms expect to make significant capital expenditures to increase capacity or productivity in 2012, while about one-third of respondents do not expect to make significant capital expenditures in 2012.
Camden Firms Expecting to Invest in 2012
Uncertain/Not applicable
19%
No
32%
Yes
49%
0%
10%
20%
30%
40%
50%
60%
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Survey question: Relative to optimal capacity is your firm’s CURRENT LEVEL OF OPERATIONS…
Response Above capacity At capacity Below capacity Substantially below capacity Uncertain/Not applicable
Response Percent 3.9% 27.2% 45.6% 13.6% 9.7%
Response Count 4 28 47 14 10
These results indicate that 31 percent of Camden businesses are currently operating at or above capacity, while 59 percent are currently operating at a level below capacity. While we would of course prefer to see firms operating at greater levels of capacity, these results show improvement over 2010. Last year’s Pulse of Camden study found that 27 percent of Camden firms were operating at or above capacity, while 66 percent were operating at some level below capacity.
Current Level of Operation Uncertain/Not applicable
10%
Substantially below capacity
14%
Below capacity
45%
At capacity
27%
Above capacity
4% 0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
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Survey question: This year, your firm found access to credit to be‌
Response Not difficult Difficult Did not seek access to credit
Response Percent 20.4% 23.3% 56.3%
Response Count 21 24 58
More than half of Pulse of Camden respondents did not seek access to credit in this year. Of those that did, slightly more than half found access to credit difficult, slightly less than half found it not difficult.
Access to Credit
Not difficult 21%
Did not seek access to credit 56%
Difficult 23%
These results are consistent with national data. Of small businesses recently surveyed by the National Federation of Independent Business (recall pages 15 and 16 of this report), 50 percent were not seeking access to credit, while only 7 percent reported that credit supply was a problem.
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Naval Submarine Base Kings Bay (NSBKB) The Naval Submarine Base Kings Bay (NSBKB) is not only a vital component of the nation’s defense; it is a crucial component of the Camden County economy. To get a better understanding of the relationship between NSBKB and Camden business firms, this year’s Pulse of Camden study asked two questions concerning the base.
Survey question: Does your company provide support, goods, or services to Naval Submarine Base Kings Bay?
Response Yes No
Response Percent 47.1% 52.9%
Response Count 48 54
Slightly less than half of respondents indicated that they provide support, goods or services to NSBKB.
Business Conducted with NSBKB
Yes 47% No 53%
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Survey question: What percentage of your sales/income is provided by your business with NSBKB?
Response
Response Percent 76.5% 9.8% 6.9% 4.9% 2.0%
0-20% 21-40% 41-60% 61-80% 81-100%
Response Count 78 10 7 5 2
More than three-quarters of respondents indicated that between 0 and 20 percent of their sales or income is generated from business with NSBKB. Thus, as important as NSBKB is to the Camden economy, most Camden businesses have a healthy degree of diversity in their customer base.
Percent of Sales/Income from NSBKB 81-100%
61-80%
41-60%
21-40%
0-20% 0%
10%
20%
30%
40%
50%
60%
70%
80%
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Desired Programs or Services
Survey question: Please indicate if your business would benefit from programs and/or services in the following areas.
Response Securing Capital/Credit Staff Training/Employee Development Marketing/Promotion Accounting/Business Planning/Financial Counseling Facilities/Real Estate Business Information/ Economic Data Expansion Incentives Recruiting/Staffing Legislative Representation/ Advocacy Business Counseling/ Mentoring/Networking Other
Need/Would Like Support 24.8% (25)
Do Not Need or Desire Support 75.2% (76)
34.0% (34)
66.0% (66)
59.4% (60)
40.6% (41)
14.9% (15)
85.1% (86)
15.8% (16)
84.2% (85)
48.5% (49)
51.5% (52)
32.7% (33) 28.7% (29)
67.3% (68) 71.3% (72)
57.4% (58)
42.6% (43)
36.6% (37)
63.4% (64)
10.5% (11)
89.5% (68)
The Pulse of Camden study results above display an assortment of programs and services that could be beneficial to businesses in Camden County. The results indicate that Camden County business owners would like more support in three areas in particular:
Marketing and Promotion Legislative Representation and Advocacy Business Information and Economic Data
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Economic Outlook for Camden County Almost all local economies in the U.S. -- including Camden County -- find themselves in essentially the same situation: the forces that are restraining development and growth are totally beyond local control. The sovereign debt crisis in Europe, the fiscal quagmire in Washington, the continuing glut in the real estate market and depression in the construction industry all weigh heavily on local economies, yet there is nothing a local economy can do about any of them. Two other forces are restraining local economies. One is the high level of unemployment from recent sector shifts. The real estate bust and depression in the construction sector caused many people with specialized skills in those industries to lose their jobs. Real estate and construction are unlikely to ever be the same, which means workers who lost their jobs in those industries must find jobs in other industries. If their skills are specialized, finding employment in another industry is difficult, especially in a weak economy. The other force restraining local economies is the fiscal predicament of state and local governments. Most state and local governments operate on a balanced budget by law. During economic downturns, tax revenues fall. To maintain a balanced budget, expenditures are cut and workers let go. Such policies inadvertently amplify the downturn. Camden County knows these forces all too well. Employment in Camden’s construction sector has fallen by 57 percent since 2007. The decrease in employment in construction, real estate, and federal, state and local employment accounts for almost 40 percent of the total decrease in employment in the county since 2007. But the situation for local economies is by no means hopeless. A local economy can grow and develop in spite of the unfortunate forces beyond its control. Local economies can achieve great things when local policy makers and development decision makers work together as a team for the shared goal of bettering of the community. Local economies can achieve great things when they aim high: when they seek what is possible and what is better, rather than more of the same. A diverse industrial mix is highly desirable. A local economy that is grounded on one or two industries or employers runs a great risk: if those industries or employers should fall on hard times or leave, the local economy can be devastated. Fortunately in Camden County, policy makers and development decision makers are being proactive and taking significant steps to help the local economy rebound and reposition this economy for sustained growth into the future. Some of these steps include:
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The Camden County Joint Development Authority, Camden County Chamber of Commerce, The Camden Partnership, College of Coastal Georgia, the Cities of Woodbine, St. Marys and Kingsland, and the Camden County Public Schools are formulating a new “Team” approach to fostering economic growth and development in the community. This Team will bring together the strengths, expertise, and special benefits of each entity; optimize efforts to attract and recruit new economic activity; and yield efficiencies and greater potential outcomes for the community moving forward. The economic development Team was instrumental in recently securing a Work Ready Region grant from the State of Georgia. The grant will be applied to enhance workforce quality, indentify demand occupations, and begin developing training programs to equip the local workforce for these emerging demand occupations;
A new integrated marketing and promotion effort will be explored between the economic development Team and local convention and visitor bureaus (CVBs) to leverage resources in a more focused and targeted manner;
The Team has established goals and initiatives to diversify the economy by attracting more industry, retirement, and service related sectors to the County, and to help balance the challenges being experienced by the real estate, construction, and government sectors of the economy.
Providing market data and resources to the internal business community and those external Prospects investigating the community. Examples of such data and resources include: this “Pulse” of Camden, annual industrial market surveys and studies, seminars and training resources on a variety of business topics, forums, and related activities.
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Directory of Services in Camden County
Camden County Chamber of Commerce web: camdenchamber.com/index.cfm
Do Business in Camden County: camdenchamber.com/do-business/index.cfm Telephone & Utilities: camdenchamber.com/live-and-work/index.cfm?page=LiveWork|Telephone-Utilities Work Ready Certified Community: For Employers -- For Employees For more information call: 912.729.5840
Camden County Joint Development Authority web: www.ccjda.com
Demographics: ccjda.com/demographics.html Workforce: ccjda.com/workforce.html For more information call: 912.729.7201
City of Kingsland web: kingslandgeorgia.com How to apply for a business license, job, etc.: kingslandgeorgia.com/index.aspx?NID=119 Economic Development: ga-kingsland.civicplus.com/index.aspx?NID=87 For more information call: 912.729.5613
City of St. Marys web: www.ci.st-marys.ga.us/index.htm#home How to apply for a business license, job, etc.: www.ci.st-marys.ga.us/applications.htm#businessforms Economic Development: www.ci.st-marys.ga.us/eda.htm#eda For more information call: 912.510.4000
City of Woodbine web: woodbinegeorgia.net/index.php For more information call: 912.576.3211
College of Coastal Georgia(CCGA) web: ccga.edu How to apply to CCGA: ccga.edu/admissions/ Camden Center: ccga.edu/camden/ Support the College: ccga.edu/Advancement/foundation For more information call: 912.510.3300
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Federal and State Resources for Camden Area Businesses Federal Resources Facts & Links about the USA: usinfo.state.gov Federal Statistics: fedstats.gov Federal Trade Commission: ftc.gov Federal Withholding: irs.gov/individuals Internal Revenue Service: irs.gov Social Security Administration: ssa.gov U.S. Small Business Administration: sba.gov U.S. International Trade Administration: ita.doc.gov U.S. Census Bureau: census.gov
State of Georgia Resources A small business in Georgia is a business which is independently owned and operated and must have fewer than 100 employees or less than $1 million in gross receipts per year. georgia.org/BusinessInGeorgia/RelocatingExpanding/Pages/default.aspx Expanding/Relocating Your Business: georgia.org/BusinessInGeorgia/RelocatingExpanding/Pages/default.aspx Getting Financial Assistance: georgia.org/BusinessInGeorgia/SmallBusiness/BusinessResources/Pages/default.aspx#financial Government Opportunities and Regulations: georgia.org/BusinessInGeorgia/SmallBusiness/BusinessResources/Pages/default.aspx#governm ent Starting a Business georgia.org/BusinessInGeorgia/SmallBusiness/BusinessResources/Pages/default.aspx#starting Tax Credits/Exemptions georgia.org/BusinessInGeorgia/SmallBusiness/BusinessResources/Pages/default.aspx#tax
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Partners and Sponsors Camden County Chamber of Commerce The mission of the Camden County Chamber of Commerce is to improve and enhance the economic vitality and the quality of business life for the total community and area. The Chamber serves as an advocate, voice and resource for the businesses in our area and provides partnership opportunities for business, community and government. The Chamber is an excellent resource for current business owners and/or anyone interested in starting a small business in Camden County. Resources include the UGA Small Business Development Center, the Small Business Committee and the Workforce Development Committee of the Chamber of Commerce. Camden County was the first coastal County to earn the Work Ready Certified Community designation. Camden County has a highly trained Work Ready workforce and leads the State with 42 percent of its workforce holding a Gold Level Certificate. The State averages 19 percent Gold Level Certificate holders. Camden County also has a renowned quality of life, moderate cost of living, and vast experience in technology, manufacturing, research and development, and is home to Naval Submarine Base Kings Bay. Located in southeast Georgia, Camden County remains one of Georgia’s best kept secrets, a place rich in history, natural beauty, and Southern hospitality.
Camden County Chamber of Commerce Board of Directors Christine Daniel, President/CEO Jennifer Lewis, Chairwoman & Executive Committee Alecia Webb, Vice Chairwoman & Executive Committee Jill Helton, Secretary/Treasurer & Executive Committee Bert Guy, Past Chairman & Executive Committee Mark Belcher Doug Cooper Nancy Dervaes Bill Gross Artie Jones, Jr. Stephen Kinney Barbara Ryan Jon Shiels Charles A. Smith Royal Weaver
Camden County Chamber of Commerce 2603 Osborne Road, Suite R St. Marys, GA 31558 Phone: (912) 729-5840 Fax: (912) 576-7924 Email: info@camdenchamber.com Website: www.camdenchamber.com
Allen Eldridge Matt Kircher Gary Straight Brendon Winstead
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Camden County Joint Development Authority The mission of the Joint Development Authority (JDA) is to promote Camden County and its Cities to expand and diversify the economy and stimulate the creation of quality employment opportunities to provide a better quality of life for citizens. The JDA is a public authority established in 1981 by state and local statute, empowered with unique tools and incentives to promote business, industry, and agriculture within the county. The Authority is governed by a nine member Board of Directors comprised of three county representatives and two representatives from each of the three cities (Kingsland, St. Marys, and Woodbine). The Authority is managed by an Executive Director.
CCJDA Board of Directors
David Keating, Executive Director John McDill, Chairman and Executive Committee Gary Willis, Vice-Chairman and Executive Committee Jimmy McCollum, Executive Committee Stan Fowler, Executive Committee Keith Dixon George Hannaford Louise Mitchell Roger Tyo John Morrissey
Camden Joint Development Authority 107 N Gross Road Kingsland, GA 31548 Office: (912) 729-7201 Email: ccjda@co.camden.ga.us Website: www.ccjda.com
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College of Coastal Georgia As a fast-growing college of the University System of Georgia, the College of Coastal Georgia offers baccalaureate programs of study and pre-baccalaureate programs for transfer. The College also serves as a portal to graduate education. It is the mission of the College to: Foster academic excellence and individual development in a supportive environment that expands access to higher education and career preparation and enriches student lives; Investigate, capture, and disseminate 21st century knowledge and skills, blending student-centered classroom education and innovative service learning to provide students with a solid foundation to support lifelong learning and leadership and appreciation for social responsibility, global awareness, diversity, and engaged entrepreneurship; Provide accessible and affordable higher education to a wide spectrum of learners, from recent high school graduates to returning adults; and Engage actively in the community and region through many avenues, including professional development programs, economic development partnerships, service learning, public service, early college programs, applied scholarship, and cultural enrichment. An education at the College of Coastal Georgia is a life-changing experience for people who seek to further their education, advance in their career, or start a new career. The Brunswick campus is located midway between Savannah, Georgia and Jacksonville, Florida with the beaches of St. Simons Island and Jekyll Island just minutes away. The beautiful Camden Center at the Lakes, located in Kingsland, 20 miles north of Jacksonville provides convenient access to higher education for all Camden County residents.
College of Coastal Georgia 8001 Lakes Blvd. Kingsland, GA 31548 Phone: 912.510.3300 Website: ccga.edu
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Authors Dr. Don Mathews is Professor of Economics in the School of Business and Public Affairs at the College of Coastal Georgia. Don has published articles and essays in both professional journals and general audience venues. He teaches Macroeconomics, International Economics, and Labor Economics at the College. His primary research field is the history of economic ideas. He can be reached at dmathews@ccga.edu. Jessin Oueslati is an undergraduate research assistant at the College of Coastal Georgia and recently earned his bachelor in business administration degree from the College. Jessin won several awards and scholarships for his outstanding academic performance at the College, including the Henry and Julia Rose Scholarship and the Golden Isles Maritime Club Scholarship.
Acknowledgments The authors sincerely appreciate the support of the many partners and sponsors who made this project possible. The study’s partners include the Camden County Joint Development Authority, the Camden County Chamber of Commerce, and the College of Coastal Georgia. Special thanks go to David Keating, Executive Director of the Camden County Joint Development Authority; Christine Daniel, President/CEO of the Camden County Chamber of Commerce; and their staff members. Special thanks also go to all the Camden County region business owners and executives who responded to our requests for information and assistance. Special thanks also go to Georgia Pacific, Georgia Power, and the College of Coastal Georgia for their sponsorships of the Pulse of Camden.