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Nov. 27 CFEDC Presents: The Impact of Cement Manufacturing on Economic Growth in New Hanover County

by Julie Martin on November 6, 2012

Since New Hanover County residents first learned in the spring of 2008 that Titan America planned to build a cement plant on the banks of the north Cape Fear River, supporters and opponents of the plan have asserted their owns takes on the environmental and health risks, and debated the merits of taxpayer incentives offered to the company. But one important area of concern has often been overlooked: the proposed plant’s potential economic impact.

Craig S. Galbraith

The Cape Fear Economic Development Council (CFEDC) will host a presentation on the issue Nov. 27, 6-7:30 p.m., at the WHQR Gallery, 254 N. Front St., Suite 300. UNCW Cameron School of Business professor Craig Galbraith
will discuss “The Impact of Cement Manufacturing on Economic Growth in the Cape Fear Region,” a recent study commissioned by the North Carolina Coastal Federation and the only comprehensive economic analysis of the project. A question and answer period will follow.

No economic impact studies were commissioned by New Hanover County or the state of North Carolina, even though taxpayer incentives were offered to the company to encourage development of the plant.

“This issue has been described as a clash of the old and new economies in our region, and regardless of what happens in this case, it is important for the public to understand how we arrived at this point, and how we can avoid similar ill-considered economic development decisions in the future,” said Lloyd Smith, CFEDC secretary.

The event is part of the organization’s bimonthly “CFEDC Presents” series. Refreshments will be served from 6-6:30 p.m. during a time for networking and open discussion.

The CFEDC is a non-profit organization working to fulfill the need for leadership in sustainable economic development and job creation in Wilmington and the Cape Fear region.

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  1. A bit more analysis from NC Coastal Federation on the Titan economic impact study presented by Dr. Galbraith last night:

    Economic Impacts of the Titan Cement Plant

    During their campaign to build public support for a cement plant in Castle Hayne, Titan Cement officials consistently reference the addition of jobs and economic input to the Cape Fear region as a boost to an economy still pulling itself out of the recession. However, the official projections from Titan fail to take
    into account all but the most basic effects of opening the plant. Below are summary points from two economic analyses which used data from a broader set of methods to estimate the full range of impacts to the Cape Fear regional economy.

    From The Impact of Cement Manufacturing on Economic Growth In the Cape Fear Region, 2012, by Dr.’s Craig S. Galbraith and Curt H. Stiles, Professors of Economics at UNC Wilmington:

    The analysis shows that even given Titan’s best-case hiring projections, New Hanover County will likely see only 48 jobs added.

    Previous studies have shown that “low technology” plants, like a cement plant, result in less net jobs than they actually hire, meaning that some jobs are driven out of the area 1.

    For New Hanover County, Titan could drive away as many as 70 existing jobs for every 100 people it employs.

    Titan would be unlikely to have many of the positive “ripple effects” that other industries such as information and professional services have, like the creation of a more skilled or educated workforce.

    Proximity to the ocean, scenic views, historic districts, architectural beauty, and cultural and recreational opportunities are the main drivers for attracting leisure visitors and second-home buyers to an area.

    The greatest promise of growth for the economy of the Cape Fear region lies in the amenities and professional services industries. Their continued growth depends on perceptions that can be negatively affected by the mere presence of heavy polluting industries, such as cement manufacturing facilities.

    From Economic Effects of the Introduction of Cement Manufacturing in the Wilmington MSA: A Review, 2012, by Dr. Doug Wakeman, Professor of Economics at Meredith College:

    The Cape Fear region has a unique economy which depends heavily on tourism and residential development, industries which are driven by people’s desires to enjoy the natural resources of
    the area. Analyzing a cement plant in the Cape Fear region is far different from examining a new automobile factory in Detroit, since New Hanover County has a strong tourism and amenities
    based economy, with relatively more to lose in terms of damage to visitors’ perceptions.

    Titan’s job creation and economic estimates were projected using an “IMPLAN analysis,” a method preferred by industry because they are the easiest to perform and produce the largest values most favorable to industry. These studies are also the least meaningful, because they fail to net out expenses associated with the change.

    A 2011 health study estimated the impact on health care bills associated with Titan’s air emissions for two pollutants over a five-month period. The estimates ranged from $6 million to $13 million for this period, which would very possibly exceed the total incomes from the creation of 100 cement jobs.

    New heavy industrial plants have a tendency to drive away business and residential development, as well as hurting future development.

    While the exact effects are impossible to know in advance, it is a virtual certainty that the impacts on commercial and recreational fishing, boating, paddling, birding, and other water sports will be negative and possibly quite significant.

    The operation of and location of the plant itself, at the heart of the riverine ecosystem, creates the potential for a large-scale environmental disaster, with a resulting negative impact on the
    ecosystem and the region’s overall economy.

    Based on an analysis of the economic returns from conservation, the unique riverine resources and lands of the Cape Fear Region could generate over $1.1 billion in ecosystem services over 30 years, the minimum period of time Titan plans to operate. At risk from Titan’s industrial emissions are the goods, services, and recreational benefits that those resources and
    ecosystems provide.

    Americans spent more than $120 billion hunting, fishing, and wildlife watching in 2006. 71 million Americans spent over $45 billion on wildlife watching alone.

    In 2011, 140 full-time jobs were added due to tourism in the Cape Fear region, more than all the jobs that Titan Cement is projected to add.

    Tourism in the Cape Fear region directly supports over 10,000 jobs. Last year, tourist expenditures in the Cape Fear region generated more than $49 million in local taxes and $45 million in state taxes.

    Ocean fishing along public piers on the North Carolina coast generated over $150 million in economic impact, supporting over 1,700 jobs in 2010. Nearly half of those piers are located in
    the Cape Fear region.

    Over 32,000 Coastal Recreational Fishing Licenses were sold to residents of the Cape Fear region in 2010, accounting for over 7% of the state’s total.

    This report was prepared by Samuel Wilson at the North Carolina Coastal Federation. Contact: sam@stoptitan.org

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