3rd Quarter 2018 Hotline
by Joe A. Hollingsworth, Jr.
Well, officially, we are in the second longest economic expansion ever! And, as I said before, there is an awful lot of naysayers, and they cannot help but talk about it constantly. However, they are wrong!
The tax cut that Congress passed has motivated businesses of all sizes to reassess the opportunity of using the tax savings for capital expenditures that will dramatically increase productivity. This is happening from sandwich shops to major defense firms. CFOs are actively using the tax savings to dramatically increase productivity and profits. This is playing out in company valuations, share prices, capital expenditures, etc., thus benefitting everyone all the way down to the factory floor. Daily, we talk to management of any of the 124 companies that we lease to, and it seems like that is their opening line. They are excited about what they can achieve.
Onto the statistics…Last month, the Bureau of Economic Analysis revised its assessment for the 1st Quarter of 2018; the BEA now says that the GDP grew 2% annualized, down from the previous figure of 2.2%. A more accurate measure averages factors in statistics on incomes which shows growth at 2.80%. The difference between this is the BEA does a separate analysis by adding up all the different sources of wages, profits, and various forms of income. BEA calls this Gross Domestic Income. Using those numbers, it is closer to 3.7% annualized. Generally, forward-thinking economists average these two together, thus the 2.80%. This shows the GDP is accelerating for 1st quarter, and 2nd quarter 2018 should be north of 4.5% using the same average.
Okay, maybe you are still a naysayer……A few things that could happen on the upside such as the NATO Alliance fully funding their part of the military, North Korea continuing to calm down, and the WTO making China play by the rules - all of which will indirectly affect the stability of the global economy, that will result in better support for the US growth. But, here are a couple of big surprises that we predict are coming October of this year. These will totally turn the midterms toward conservatives and also assure the re-election of conservatives for the presidential cycle: 1) The NAFTA surprise! – a greatly improved NAFTA agreement that gives blue collar and union voters a direct impact and reason to support conservatives; and, 2) President Trump through an Executive Order will invoke a 2002 Supreme Court ruling that sets the stage for indexing capital gains for inflation like most IRS rates are. This in effect would lower taxation on capital gains which always provides significant economic growth.
Based on all the above, this will be by far the longest expansion in American history. Internally, our company is preparing for the ride! Therefore, industrial builders, build baby build!
Industrial Development continues at record pace in Huntsville, Alabama
July 24, 2018
The Hollingsworth Companies break ground on two new industrial lots and will complete two facilities under construction in the SouthPoint Industrial Park
Huntsville, AL – July 24, 2018 - The Hollingsworth Companies broke ground on their ninth and tenth industrial project in SouthPoint Industrial Park, Alabama. This is the third and fourth projects started within the last 12 months and is designed to support the continued growth in the North Alabama market. The two new lots are designed to support industrial facilities from 108,960 SqFt to 195,360 SqFt, with an additional lot that will support facilities up to 327,600 SqFt. These lots are available for Build to Suit projects focused on light manufacturing, warehousing, and distribution.
The expansion in SouthPoint has been fueled indirectly by the city’s existing top employers that include the U.S. Army, 35,000 employees, NASA/Marshall Space Flight Center, 6,500, and Boeing 2,600. As well as a rapid growth over the past three years of more than 9,000 new jobs created across the city of Huntsville. Some of the largest areas of growth have been observed in companies like Polaris and Remington. Polaris, for example, has brought 2,000 jobs to the Huntsville area alone. Further growth is expected from the newly announced Mazda/Toyota joint venture (MTMUS) facility. The facility is expected to create up to 4,000 jobs. Toyota and Mazda are investing $1.6 billion towards this project with additional investment expected from Tier 1 and Tier 2 suppliers.
Mark Yarborough, Chairman of the Limestone County Commission stated, “We are excited to work with The Hollingsworth Companies and see the continued growth at SouthPoint Industrial Park. Clearly there is a demand for industrial buildings in Limestone County and this will continue to increase with the new Mazda Toyota assembly plant. These new facilities with be a welcome addition to the available inventory of high quality industrial space in our area.
“Limestone County Economic Development Association (LCEDA) is very happy to see that the Hollingsworth Companies is adding two additional pregraded lots to the SouthPoint Business Park in Limestone County, Alabama. In this era of industrial activity, having large industrial buildings ready for occupancy is a real plus for the Limestone/Madison area. We are pleased to continue our long term relationship with The Hollingsworth Companies and look forward to helping bring occupants to park” added Tom Hill, President of the LCEDA.
In addition to the two new pregraded sites in SouthPoint, two completed buildings are available for lease. A 227,600 SqFt class A building with 14 loading docks and 30’ clear height and a 108,960 SqFt building with 6 loading docks and 32’ clear height. Both buildings include LED lighting, 60’ x 60’ column spacing, ESFR fire suppression system and are suitable for light manufacturing, warehouse or distribution space.
The SouthPoint Industrial park is located adjacent to the I-65 and I-565 interstates, between Nashville, TN and Birmingham, AL. This location provides quick access for companies that want to be centrally located in the Southeast manufacturing corridor. The SouthPoint Park, Alabama was designed for companies that support the greater Huntsville MSA that includes the Southern Automotive corridor, Red Stone Arsenal, Army Contracting Command, and NASA’s Marshall Space Flight Center.