by Kelley Rendziperis, on Jan 23, 2023 11:15:00 AM
To help understand economic incentive trends, this blog evaluates economic incentive deals announced during 2022.
$24.4 billion in economic incentives
As of the date of publication, Site Selection Group identified 1,768 economic incentive packages offered to companies across the United States during 2022. These economic incentive packages represent an estimated total incentive value of approximately $24.4 billion. To garner these economic incentives, companies are expected to spend roughly $262.9 billion of capital investment and generate 290,033 new jobs, resulting in:
- A total return on investment of approximately 9.3%
- An average economic incentive award of $84,125 per new job
- An average incentive award of approximately $13.8 million per project
- A median economic incentive award of approximately $600,000
Based on the magnitude of a handful of the largest announced awards in 2022, the statistics above are skewed. For example, with these significantly large projects included, 2022 had a decrease in the number of announced awards from last year by roughly 20.9%, from 2,236 to 1,768 projects, but saw an astounding increase of 173.5% in the total value of announced economic incentive awards and a 254% increase in the average award per job. Committed capital investment increased as well by 48%, but the number of jobs to be created decreased by 22.8%.
The largest announced projects were primarily in the semiconductor and electric vehicle space, in addition to a new steel mill project. The largest announced economic incentive package this year was offered to Micron Technology: approximately $5.8 billion. Micron Technology, which designs and develops semiconductor systems for computers, servers, networking devices, communications equipment, consumer electronics, automotive and industrial applications, plans to invest $100 billion to establish a new 7.2 million-square-foot semiconductor manufacturing facility in Clay, New York. The company will create 9,000 new jobs over a 20-year period paying an average annual wage of $100,000. The company was awarded $5.5 billion in tax credits over a 20-year period through the New York Excelsior Jobs Program. The company was also awarded $200 million in incentives from the State of New York for road and infrastructure improvements and $100 million in funding for community benefits from the Green CHIPS Community Fund to support the project. Notably, the value of this award does not include a Payment in Lieu of Taxes (PILOT) agreement, training benefits, or the federal semiconductor CHIPS benefits which are all likely to be awarded to Micron as well.
In addition to Micron, Intel received an economic incentive package valued at approximately $1.95 billion for the establishment of two semiconductor manufacturing facilities in New Albany, Ohio.
On the electric vehicle and electric vehicle battery front, Hyundai, Rivian, and Starplus Energy each received economic incentive packages in excess of $1.5 billion for creating facilities in Georgia for Hyundai and Rivian and in Indiana for Starplus.
Finally, rounding out the awards exceeding $1 billion, Nucor received $1.66 billion for its commitment to establishing a new sheet steel mill in West Virginia.
To more accurately report on the value of economic incentives announced in 2022, by excluding the six megaprojects, the results are:
- A total return on investment of approximately 8.2%
- An average economic incentive award of $39,861 per new job
- An average incentive award of approximately $5.8 million per project
This is based on approximately $127 billion of capital investment and 260,233 new jobs. Notably, even without the six megadeals, all the metrics are still higher than those in 2021 with fewer announced projects.
Overall, the 1,768 projects announced during 2022 represented 43 states, led by Ohio with 273 announced projects, and Kentucky with 154.
Top 10 States for Number of Announced Incentive Packages
Data Source: IncentivesFlow, a service from WAVTEQ Limited
The following chart depicts the number of projects announced during 2022 broken out by estimated economic incentive value:
Number of Projects by Incentive Value
Data Source: IncentivesFlow, a service from WAVTEQ Limited
Approximately 58%, or 1,033 of the 1,768 announced projects, were awarded economic incentive packages valued at $1 million or less and 87% were awarded economic incentive packages valued at $5 million or less. While the average economic incentive package was valued at approximately $13.8 million for all 1,768 announced projects, the average award for the top 25 deals was approximately $746.9 million.
The following chart depicts the breakdown of the 1,768 announced projects during 2022 by industry function:
Number of Projects by Industry Function in 2022 (Annual)
Data Source: IncentivesFlow, a service from WAVTEQ Limited
Manufacturing continues to be the top incentivized industry function this year. The sector was led by Micron Technology and Intel, detailed above. The chart below illustrates the level of capital investment committed by the industry sector in 2022:
CapEx Value by Industry Sector in 2022 (Annual) (USD m)
The top industry sectors in terms of projected capital investment were the electronics and automotive sectors, which together account for nearly 71% of all the investments announced during this period.
Notable economic incentive packages in 2022
The top 25 economic incentive packages announced in 2022 represent approximately $18.7 billion of the total $24.4 billion of estimated incentives for all projects or approximately 77%. These projects in isolation will account for:
- $168.4 billion of capital investment
- 62,422 new jobs
- A return on investment of approximately 11.1%
- $299,125.31 average award per new job
The announced economic incentive awards for the top 25 deals alone account for more incentives announced than the entire year of 2021. The following table identifies 20 of the largest economic incentive deals (removing real estate development and film incentives) offered in 2022. These projects provide a great way to benchmark the potential range of economic incentives for a variety of project types. However, it is important to understand these values are estimated and typically only reflect state-level incentives.
Company |
Location |
Industry function |
Incentives Value(USD m) |
Capex (USD m) |
Jobs Created |
| Micron Technology | Clay (NY) | Manufacturing | $5,800 | $100,000 | 9,000 |
| Intel | New Albany (OH) | Manufacturing | $1,950 | $20,000 | 3,000 |
| Hyundai Motor Co. | Savannah (GA) | Manufacturing | $1,800 | $5,500 | 8,100 |
| Nucor | Weirton (WV) | Manufacturing | $1,665 | $2,700 | 800 |
| Rivian | Unspecified (GA) | Manufacturing | $1,469 | $5,000 | 7,500 |
| Starplus Energy | Kokomo (IN) | Manufacturing | $1,341 | $2,620 | 1,400 |
| Panasonic Corporation | De Soto (KS) | Manufacturing | $829 | $4,000 | 4,000 |
| Gotion High-Tech | Big Rapids (MI) | Manufacturing | $715 | $2,360 | 2,350 |
| Vingroup | Unspecified (NC) | Manufacturing | $352.70 | $4,000 | 7,500 |
| Ultium Cells | New Carlisle (IN) | Manufacturing | $260 | $2,500 | 1,600 |
| Our Next Energy (ONE) | Van Buren Twp (MI) | Manufacturing | $236.60 | $1,600 | 2,112 |
| Ford Motor Company | Avon Lake (OH) | Manufacturing | $205 | $1,500 | 1,800 |
| Microvast | Clarksville (TN) | Manufacturing | $200 | $504.50 | 700 |
| ICL-IP | St. Louis (MO) | Manufacturing | $197.30 | $429.60 | 16 |
| LG Corporation | Holland (MI) | Manufacturing | $189.10 | $1,700 | 1,200 |
| Stellantis | Kokomo (IN) | Manufacturing | $186.50 | $2,500 | 1,400 |
| Solvay | Augusta (GA) | Manufacturing | $178.20 | $356.40 | 100 |
| Honda Motor | Unspecified (OH) | Manufacturing | $156.30 | $4,200 | 2,527 |
| NOVONIX | Chattanooga (TN) | Manufacturing | $150 | $1,027.30 | 1,000 |
| Albemarle | Kings Mtn (NC) | Manufacturing | $149.70 | $375.60 | 0 |
Data Source: IncentivesFlow, a service from WAVTEQ Limited
Notable awards in the business services industry in 2022
Most projects are not nearly as sizable in terms of incentives offered as the top 20 highlighted above. Thus, we like to share notable 2022 projects garnering economic incentives in the business services and call center industries:
Company |
Location |
Industry function |
Incentives Value(USD m) |
Capex (USD m) |
Jobs Created |
| Discord | San Francisco (CA) | Bus. Services | $27.90 | $85.00 | 1,434 |
| Microsoft | Multiple (CA) | Bus. Services | $25.65 | $400.00 | 1,789 |
| Goldman Sachs Group | Dallas (TX) | Bus. Services | $18.02 | $480.00 | 2,500 |
| Jane Street Group | New York City (NY) | Bus. Services | $14.00 | - | 2,076 |
| Chubb | Philadelphia (PA) | Bus. Services | $13,30 | $82.00 | 1,250 |
| AML RightSource | Buffalo (NY) | Bus. Services | $7.40 | $4.30 | 363 |
| Spokenote | Fishers (N) | Bus. Services | $7.22 | $3.00 | 300 |
| McKesson | Franklinton (OH) | Bus. Services | $6.70 | $250.00 | 1,600 |
| Morgan Stanley | Unspecified (UT) | Bus. Services | $6.54 | $1.00 | 800 |
| Acct Holdings | Shreveport (LA) | Call Center | $1.00 | $1.50 | 600 |
Data Source: IncentivesFlow, a service from WAVTEQ Limited
Conclusions
In sum, while there were fewer projects announced in 2022, the value of economic incentives offered in total, as well as per project on average, were significantly higher than in 2021. The increase reflects an influx of investment and significant market activity, specifically in the semiconductor and electric vehicle space. We will analyze these findings further in the upcoming release of our 2023 Economic Incentives U.S. Market Report.
Please note that the analysis above is based on publicly available data at the time of this blog. In addition, the current data is compared to the information available at the time of prior blogs.
For additional information about these projects and others, please contact me at krendziperis@siteselectiongroup.com with any questions.
Contributions by Matthew Kahn.
