COVID-19 has had a devastating impact on our nation and our state. Our population and certain segments of business have been hit hard. In particular, the retail and hospitality sectors have been hit very hard.
But what about manufacturing and distribution? Based upon information received from the S.C. Department of Commerce, the S.C. Department of Agriculture and a number of regional Alliances, the pipeline for projects remains reasonably strong. We have had several significant announcements around the State including the Agriculture Technology Campus in Hampton County, Mark Anthony Brewing in Richland County, and the expansion of Nephron Pharmaceuticals in Lexington County. A few large distribution projects and expansions have also been announced.
We note that certain sectors are faring better than others. The automotive sector remains strong. The agribusiness sector is strong and growing. On the other hand, the aerospace sector is down, which has an adverse impact on suppliers in this State. On the positive side, it does appear that Boeing is consolidating certain operations and South Carolina will be the beneficiary.
As you know, South Carolina has been strong in attracting foreign corporations to this State. As a result of COVID-19, there have been stringent travel restrictions and therefore very little direct contact with foreign company officials. Despite this, reports indicate that South Carolina seems to be on track to improve over last year's numbers pertaining to the establishment and/or expansion of manufacturing and distribution projects. Foreign direct investment is down, but not as much as one would expect.
So why is this? First, interest rates remain low, encouraging borrowing to facilitate expansion and investment. PPP loans have also assisted some manufacturing companies. From an employment perspective, more people are moving into the State. The loss of jobs in the retail and hospitality markets has created a hiring opportunity for manufacturers. In addition, manufacturers are focused on long term goals. COVID-19 represents an obstacle but not a complete deterrent for new projects.
Some factors, however, continue to hurt the recruitment of industry to this state. Travel restrictions and quarantine requirements remain a major impediment to landing new projects. Although virtual meetings can be helpful, face-to-face recruitment still works better. The impact of COVID-19 on schools has also created challenges. If children are not attending school, parents may need to stay home, thereby creating employment and product delivery issues for manufacturers. And, of course, the downturn in certain industry segments will impact certain manufacturers.
One interesting note is that historically, there is less new investment and project activity during a Presidential election year. This year has been different. Activity has increased, and more companies have committed to move forward.
In summary, the State is holding its own in attracting and landing manufacturing and distribution projects. Hopefully, as the vaccines are distributed and conditions improve, the activity will continue to increase.