If you read the news today, all you will see are headlines proclaiming that GDP contracted by 3.8% in 4Q08.  Here are some of the headlines I’ve found:

• “Q4 GDP down 3.8%, biggest drop since 1982″ – Yahoo.com
• “US GDP shrank 3.8% last quarter, most since 1982″ – Bloomberg
• “Economy: Sharpest decline in 26 years” – CnnMoney.com
• “Obama addresses new numbers showing shrinking U.S. economy, calls for Senate to back stimulus” – Foxnews.com
• “GDP shrinks as spending falls” – Wall Street Journal Online

The list goes on and you get the picture.  It just goes to show how negative the news media is today.  Not one of these news venues thought to highlight the fact that our 4Q08 GDP figure beat the economists estimates by 30%!  Can that be right?  Yep, the 79 of smartest minds in the dismal science projected that the US would contract in the 4th quarter by 5.5%.  In reality, we only contracted by 3.8% in 4Q08.  In the Bloomberg article, you have to go down 31 lines before they mention that we beat the forecast.

Another point that gets lost in the negativity is that the United States economy grew in 2008.  Let me say that again, the United States economy grew in 2008.  For 2008, the US GDP grew by 1.3%.  Now, that’s not a huge growth number and pales in comparison to China’s 8% growth, but it is still growth.  It’s like getting a smaller than expected raise.  Yes, it stings, but it is far better than getting a pay cut.  However, you have to go down to line 41 before the same Bloomberg article mentions the growth.  They then go on to explain what contributed to the growth – exports and the Bush administration’s tax rebates (although Bush is not mentioned by name).  So, people are still buying American products and tax cuts were effective at boosting GDP.  Those are two very interesting points as we ponder a $900 billion stimulus plan.

There is no doubt that the US economy is hurting.  However, consumer sentiment is largely to blame for the decrease in consumer spending.  If all consumers hear about is negative news, changing consumer sentiment will be a long, tedious process.  There are some that would argue that Washington wants to portray a doomsday scenario and instill fear into the American psyche so they can garner support for the stimulus bill.  Regardless of whether you subscribe to that theory, America needs a healthy shot of optimism and today’s economic numbers could help out.  However, you have to read through some doom and gloom to find anything positive.

Whatever your political persuasion, you have to admit that this would be a great feeling.  Dancing on the seal of the president of the United States, with the woman you love, only hours after being innaugurated as President.  For that one moment, does it get any better?

The Virginia Employment Commission announced yesterday the December 2008 employment figures.  Between November 2008 and December 2008, non-farm employment decreased by 25,900 jobs.  This decline brought the State unemployment rate to 5.2%, up from 4.6% in November 2008 and 3.2% in December 2007.  To paraphrase the words of William F. Mezger, Chief Economist for the VEC, the recession has caught up with Virginia.  There were, however, some bright spots in the release.

First, Virginia’s unemployment rate remains well below the December 2008 National unemployment rate of 7.2% – approximately 25% lower.  Second, many of the State’s MSAs are doing pretty well.  Danville, while having one of the highest unemployment rates in the State, did manage to add jobs and bring its unemployment rate down 20 basis points from November to 11.5%.  Several MSAs have unemployment rates less than 5%, including Charlottesville and Harrisonburg.  Northern Virginia, the state’s largest MSA, has the best unemployment rate at 3.9%, up from 3.5% in November 2008.

Finally, several sectors added jobs from November to December of 2008.  The trade and transportation sector added 3,600 workers.  Finance added 300 jobs and information added 100 jobs.  While these are not staggering numbers, or even as large as in previous years, they do represent an addition of jobs.  In an economy where “flat” is the new “good”, “up” is the new “great”.

Even with negotiations still underway to retain Maersk as a customer at the Port of Charleston, the shipping line announced that it will reroute some of its cargo away from Charleston.  Under a vessel-sharing agreement with CMA-CGM, Maersk will eliminate one weekly service call from Charleston and add that cargo to rival ports of Savannah and Virginia.  The loss is another major blow to Charleston in what is becoming a painful saga.  This latest move is a clear indication that Maersk is serious about leaving the Port of Charleston when its contract expires in 2010.

While the loss of Maersk will be difficult for the Port of Charleston to handle, I am afraid that it may be just the beginning.  When the largest shipping line in the world publicly announces that it can’t operate in your port because it is too expense relative to the competition, few other shipping lines will be beating down your door to sign up.  Where the big boys go, so goes the little guy.

The US Department of Homeland Security confirmed that it would not extend the effective date for new information requirements on maritime cargo destined for the US.  The “Importer Security Filling and Additional Carrier Requirements” ruling, commonly known as “10+2″, went into effect January 26, 2009.  This is aimed at improving the security of our ports and joins the TWIC program as a major step towards that goal.  All indication are, like TWIC, that the new program has been implemented with minimal disruptions to service.

The Virginia Port Authority announced yesterday that the $2.5 billion Craney Island Terminal project would again be delayed.  Citing a decline in revenues due to the world economic slump, the Authority said that construction would now begin in July of 2010.  That would push final completion out to mid-2020.  This is disappointing news because the new Craney Island terminal would be a huge step towards solidifying Virginia’s position as the dominant East Coast Port.  However, the State is still pursuing other financing options that could allow the project to resume a faster track.

The blog that was formerly located at www.morelandpropertygroup.com/blog/ is now housed here.  All of the news and stories you’ve grow to love can be found here.

We are only 27 days into the new year and already the Mediterranean Shipping Company (MSC) has taken possession of its largest ship to date.  Samsung Heavy Industry Shipyard in Geoje, South Korea built the 13,800 TEU MSC Daniela.  Around the world, thirty-five vessels of this size will enter service in 2009, bringing the fleet total to 70 vessels.  Over the next 4 years, over 130 more just like her will hit the high seas.  And if 14,000 TEUs wasn’t enough for you, South Korea’s STX Shipbuilding Co. has designed a ship capable of transporting 22,000 TEUs!

SPEC SHEET

MSC Daniela is unique in a couple of respects.  First, her shear size is tremendous.  From bow to stern she measures 366m (1,200 ft) and has an overall beam of 51m (167 ft).  That hippy beam figure will mean that narrow channels are difficult, if not impossible, to maneuver.  Also, with a draught of 15m (49.2 ft) she will be very limited as to which US ports she’ll be able to call on.  There are certainly some techniques MSC can employ to wedge her into more ports such as coming in without a full load or in on a high tide, however with a necessary 15% sea margin she will still be very limited.  I have not been able to find a figure for her air draught, which will determine if she can fit under the Bayonne Bridge (among others).

Second, the Samsung designers have separated the deckhouse from the engine room and its exhaust stack.  Moving the deckhouse forward increases the visibility of the captain and the total ship capacity by allowing more containers to be stacked on deck.  It also decreases the amount of ballast water needed by better distributing the ship loads, resulting is better fuel efficiencies.

There’s no doubt that we’ll be seeing more and more Big Ships delivered.  Now we need to see a concerted effort on the US’ part to enhance our ports’ capabilities to handle them.

Continuing on yesterday’s “Good News” theme, there are a couple of other noteworthy job additions.

Continental AG, one of the world’s leading automotive suppliers, is consolidating its South Carolina manufacturing operations into its Newport News facility.  This move saves 576 jobs from leaving the state and brings in an additional 318 new jobs.  The company will invest approximately $194 million to relocate their diesel fuel injector manufacturing operations.

Sabra Dipping Company announced plans to open a state-of-the-art food manufacturing plant in Richmond Virginia (Chesterfield County).  The facility will be complete in mid-2010 and will create 260 new jobs.  Sabra is a rapidly growing joint venture between the Strauss Group and PepsiCo.

Finally, AmeriPumps announced its plans to relocate its headquarter from Chattanooga, Tennessee to Carrol County Virginia.  The company will assemble and ship water pumps throughout the Western Hemisphere from this location and will create 125 new jobs in the process.

That’s the Good News for today.  Stay tuned for more…

I, for one, am tired of the preponderance of bad news in the media today.  Every channel you watch or website you read has story after story of bankruptcies, closings, job losses, etc.  That’s why I have decided to add a new category to the blog – “Good News”.  I will do my best to pull out news tidbits that are positive and post them here.  So, here goes the first installment:

Yesterday, Virginia Governor Tim Kaine announced that LASCO Bathware has decided to expand their Halifax County manufacturing plant.  The Company will spend $1.7 million on the expansion and will add an additional 50 jobs.  That represents an 18% increase in their workforce.  More importantly, it means that those jobs will stay in Virginia.  The California based company conducted a thorough analysis and considered relocating the entire facility to Michigan, Texas or Washington.  In the end, Virginia won out and the jobs stayed here.

On the northern side of the state, Harris Teeter announced that they will invest over $100 million into a new 500,000 SF distribution center in Fredericksburg, Va.  This facility is anticipated to create 335 new full time jobs for the area.  Harris Teeter currently operates a distribution center in Spotsylvania County, Va.  It is unclear what will happen to that facility as the Company expands into the new facility.

So, there’s over 400 new jobs for Virginia in just 2 deals.  Across the state there are some extremely hard working economic development directors doing everything they can to bring new jobs to the state and keep the existing jobs.  Keep up the good work!