Hot Small Southern Markets in a Cold Economy

By Michael C. Randle

Like all economic downturns, there are exceptions to the pain. Sure, unemployment has risen in the South and large job-generating deals are down. Plant closures have increased. Yet, if you look carefully, some small markets in the region are doing well. Here are a few markets in Small Town South for you to consider as your company makes plans to expand during the recovery.

Paragould, Ark.

It is a designated community in the Jonesboro metro area, but Paragould is also designated a micropolitan area. Paragould tends toward the unique. Its name -- very likely the only municipal moniker of its kind -- was cobbled together from the last names of J.W. Paramore and Jay Gould, railroad tycoons whose separate rail lines crossed here. Paragould's railroad connection continues with hopper cars being manufactured at the American Railcars Industries' factory here and in neighboring Marmaduke that employs more than 650. Last year, Axis LLC, a joint venture of American Railcars and Amsted Industries disclosed plans to invest $75 million in a new railcar-axle factory in Paragould that will create 40 more jobs. Another 120 jobs are coming with the $40 million expansion of the Anchor Packaging plant.

Tishomingo County, Miss.

Rural Tishmingo County, located in the northeast corner of Mississippi, has had brushes with greatness only to have its dreams dashed. In the 1970s, TVA announced it would build a nuclear power plant in the county only to abandon the project in 1982. Then in 1990 NASA began construction on a $2 billion project that would manufacture a new class of solid rocket motors for spacecraft. That project, too, was abandoned several years later. Before NASA ditched the project, Tishomingo County was enjoying its lowest annual unemployment rate of 5.8 in 1993. Since then unemployment in the county has averaged about 9 percent. But things have been looking up in tiny Tishomingo County during this recession. Alliant Techsystems, or ATK, announced in February it will expand its Northeast Mississippi plant by $200 million to make composite structures for commercial aircraft, a deal that is expected to create up to 800 jobs. Also, in late 2008 G&G Steel said it would set up operations in the county with as many as 110 new jobs. We can't think of a county with less than 22,000 residents that is hotter than Tishomingo right now.

Russellville, Ark.

Set in the Arkansas River Valley with frontage on the river and Lake Dardanelle, Russellville is a pretty tourist attraction. Yet, more than tourism keeps its economy humming. It is extremely rare that you find a community of 25,000 people that is also home to 10 Fortune 500 companies, but that's exactly the case with Russellville, Ark. The town's 8,000 manufacturing employees work for divisions of Cargill, ConAgra Foods, Dow Chemical, Firestone, International Paper, Trinity and Tyson Foods. The people of Russellville recognize the advantage of supporting business in their community. In June 2007, they voted to extend a one-cent sales tax to fund a number of projects, which have served to encourage business to locate there. The tax increase will go to fund, among other projects, the purchase of property for an upscale hotel and 60,000-square-foot convention center, which should only encourage more companies to consider Russellville.

Lafayette, La.

Here is a market in the South that is unique in its approach to economic development. Lafayette is home to a large medical cluster, with Our Lady of Lourdes Regional Medical Center recently unveiling plans for a $211 million expansion, Lafayette General currently involved in a $100 million expansion and Women's and Children's Hospital investing $14 million. Other notable investments made in Lafayette during this cold economy include FlightSafety International's $120 million for an in flight training facility and several companies involved in deep offshore exploration in the Gulf of Mexico.  

Clarksville, Tenn.

Can one deal propel a market to make this list of hot markets in a cold economy? When projects of the magnitude of Dow Corning and Hemlock Semiconductor's $1.2 to $2.5 billion solar-grade polysilicon facility lands in a market the size of Clarksville, the answer is yes. Not unlike VW's investment in Chattanooga, Dow and Hemlock's investment will literally transform Clarksville's economy single-handedly. And the fact that the manufacturing project was announced in one of the worst economic environments ever makes it even more special.

Valdosta, Ga.

This market has faired well in the last year. About 2,000 new jobs have been created in Valdosta over the last year, with four new industries landing in the small South Georgia market in the last six months. Home Depot is just about to open its newest distribution facility, a 657,000-square-foot center that will house 400 workers. It should be noted that JobBait.com's Mark Hovind named Valdosta as "recession proof" in a recent study. Valdosta was the only Georgia market to be cited in the ranking.

Ardmore, Okla.

Despite some layoffs, total employment grew 2 percent in Ardmore in 2008. Work force initiatives such as flex-time, job sharing, non-working spouses entering the market, in-migration and retirees re-entering the market resulted in the work force increase. Building activity was also strong in 2008 in Ardmore, with building permits setting a record. Housing in Ardmore is steady as well and while this year job formation is expected to slow, the region should still add jobs in 2009, according to the Center for Applied Economic Research at Oklahoma State University.

Rome, Ga.

Like every market in the South, layoffs have found Rome. However, there were plenty of bright spots during the recession. Pirelli Tire NA and Marglen Industries expanded their highly automated, advanced manufacturing plants in 2008, as did Georgia Machine Works. And Coosa Valley Technical College opened its new Avionics and Aviation Maintenance School in the fall of 2008.

Columbus, Miss.

The unemployment rate in Columbus has steadily dropped since spiking last summer. Columbus has helped itself over the years by landing an all-star cast of employers including Severstal, American Eurocopter and others in the mid 2000s. Without Columbus' tremendous success over the last five years, there is no way this east Mississippi market could have done as well as it has during this recession.

Joplin, Mo.

Missouri's unemployment rate has topped 8 percent. That isn't the case in Joplin where the unemployment rate continues to hover about two points below the national average. One factor helping Joplin during these tough times is its cost of living index, which is 12 percentage points below the national average.

Lake Charles, La.

Who could guess that Lake Charles, with all of its bad luck with weather disasters (Hurricanes Ike last year and the devastating Rita in 2005) over the last four years, would be sustaining this economy like few other markets in the South? In fact, Lake Charles' unemployment rate did not top 5 percent between December 2005 and December of 2008.