North Carolina: An Economic Hotspot for Canadian Business

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Thursday August 14, 2014

North Carolina SmallOf all the American states with strong associations for Canadians, North Carolina probably doesn’t rank very high. Compared to Texas or Florida, it has a relatively small profile. But Canadian SMEs should take note: North Carolina is a prime location for Canadian business.  

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Economic growth in North Carolina

North Carolina is one of the wealthiest and most prosperous states in the union. But more impressive than its GDP  — the 9th highest in the country — is its growth rate (18.5%), which is nearly twice the American national average.

Indeed, by almost any metric (and not merely that of Canadian interests), North Carolina is a robust and thriving economic hotspot. And it’s only getting better.

Opportunity between Canada and North Carolina

The Government of Canada reports that in 2012 bilateral trade between Canada and North Carolina increased by 6% to $10.3 billion. North Carolina imports $3.4 billion worth of merchandise from Canada annually, of which equipment & machinery is the largest category (16%).

The Cambridge, ON-based company Eclipse Automation will take advantage of this opportunity in North Carolina, having announced in January that it will expand operations into the city of Charlotte. The manufacturing and testing equipment supplier opened a 25,000 square foot engineering facility on March 1st, 2014.

“We are extremely confident that the Eclipse business model will flourish in the Southeastern US,” says company CEO Steve Mai. “The region continues to be vibrant and is poised for further growth.”

In fact, many Canadian SMEs have opened operations in the state. Canadian businesses employ more than 13,000 North Carolinians in such key industries as financial services, green energy, and transportation.

One success story has been the Quebec apparel company Richelieu Legwear, which will open a state-of-the-art manufacturing facility near the capital city of Raleigh. The company already has a facility in the small town of Hildebran, NC, where it employs 60 people, and the company plans to create 205 more jobs at the new branch.

Richelieu’s investment in North Carolina was made possible by a Job Development Investment Grant (JDIG) from the state. Canadian companies expanding operations in the state can access many such incentives and subsidies, including:

  • Tax credits for job creations
  • Renewable energy property costs
  • Employee recruitment and screening services
  • Deferment, reduction, and/or elimination of import duties
  • Industrial-revenue bond financing
  • Business energy loans

The state has also targeted several industries for growth, including Life Sciences, Aviation/Aerospace, Green Energy, and Defense.

North Carolina Cities Draw Canadian Business

The city of Charlotte in particular holds a lot of appeal for Canadian SMEs. More than 275 corporations are headquartered in the city, including eleven Fortune 500 companies. This substantial business activity has helped make Charlotte the second largest banking sector in the United States, with plenty of experience facilitating local expansion for Canadian companies.

Of the 944 foreign-owned firms in the Charlotte area, 92 are Canadian, representing an increase of 30% in the last decade. Some of the largest Canadian-owned firms include Symcor Inc (financial processing), Genpak, LLC (foodservice packaging), and CCL Label.

There are more than 90 Canadian-owned businesses presently in operation in the capital city of Raleigh. Canadian businesspeople who have moved to North Carolina can enjoy networking opportunities through social groups like CanSouth, an informal gathering of more than 500 ex-pat Canucks in the Raleigh-Durham-Chapel Hill area, with a sister gathering in Charlotte.

But North Carolina’s appeal extends far beyond socializing. The state boasts access to a strong infrastructure for efficient national and international distribution, with easy access to three international airports and two deep-water ports. The Charlotte Douglas International Airport is the world’s seventh busiest airport, with daily nonstop flights to Toronto, Montreal, and Ottawa.

Continued opportunity

Canadian business owners contemplating expanding into the USA should investigate prospects in this unassuming eastern state. With so much bilateral trade already occurring and so much financial and transportation infrastructure in place, not to mention the incentives and support from local government, active Canadian business networks, and a vibrant manufacturing sector, it might just be the perfect place to start.

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