'Different Ballgame': Economy Showing Signs of Strength
North Carolina’s economy is finally showing signs of strengthening, but the improvement will not be felt evenly around the state, economists predict.
“We don’t have a boom,” said John E. Silvia, chief economist for Wells Fargo Securities in Charlotte. “We don’t have a bust. We have moderate growth, and I think that’s positive.”
Silvia said recent economic development announcements in the Charlotte and Raleigh metropolitan areas, continued net population growth and further diversification of the economy should translate into a much better year for North Carolina.
“Economic growth appears significantly stronger to start the year, but questions remain about the sustainability of the current pace of growth,” Silvia said in a recent newsletter. “Given the highly cyclical nature of growth, it is likely that the state will face a somewhat slower pace of growth midyear as a slowdown in domestic inventory building will result in slower manufacturing output.”
Silvia expanded on his newsletter last Friday during a conference call focused on the North Carolina economy that also featured commentary from co-workers Michael A. Brown, an economist, and Sarah Watt, an economic analyst.
“I think it’s a fascinating story for North Carolina,” Silvia said.
He is buoyed by the fact that the state’s gross domestic product is outpacing that of the country as a whole.
“We’re growing a little bit faster than the U.S.,” Silvia said. “Overall, we don’t have the depth of the housing problem as the rest of the U.S.”
But he added that there is not a lot of new residential construction and prices are weak, mainly because the lending environment remains difficult for builders and buyers.
Watt said there has been moderate growth in the North Carolina labor force across all major industry sectors since the recession, even in manufacturing.
“We didn’t see this in previous cycles,” she said. “I think we are in a different ballgame. North Carolina isn’t the same place it was 20 years ago.”
The degree to which the state’s metropolitan areas have regained jobs lost to the recession varies widely. Raleigh is almost back to break-even thanks to its highly skilled and technical-oriented work force, while Greensboro is still off about 10 percent.
“By far, Raleigh has made the greatest improvement,” Brown said. “We should have those jobs back in their entirety by the end of the year. Greensboro, on the other hand, has one of the most depressed labor markets among metro areas. There is a shortage of workers and a skills gap.”
Brown said that he expects a major drop in leisure and hospitality employment in Charlotte to begin rebounding this summer when the city hosts the Democratic National Convention.
“I don’t expect that to be a drag much longer,” he said.
Brown added that North Carolina’s rural areas are still struggling to recover from the recession.
“We continue to see a great dichotomy between the metro and rural areas,” he said. “Moving forward, we’re in a lot better position this year than we were last year. But there are still some challenges on the horizon, including slower revenue growth and increased health care costs.”
Moore County appears to be faring much better than most rural counties in the state. The county’s unemployment rate dropped to 8.7 percent in March, its lowest level since December 2008.
Gene Norton, manager of the N.C. Division of Employment Security office in Aberdeen, called it “a pretty significant sign” that the local economy is continuing to improve.
“I don’t see anything locally that will stop it from slowly improving over the next six to eight months,” Norton said earlier this month. “It’s what we’ve been hoping for for the past three-and-a-half years.”
The positive economic momentum played a role in the decision by Moore County Partners in Progress to hire Forward Communities to conduct a feasibility study to determine if a multifaceted social entrepreneurship initiative can be launched in southern Moore County.
Forward Communities is a subsidiary of Bull City Forward (BCF), a Durham-based nonprofit focused on catalyzing sustainable enterprises. BCF was founded in spring 2010 and served as the model for last fall’s launch of Queen City Forward in Charlotte.
BCF builds pipelines for future entrepreneurs through school and university partnerships, recruitment of outside talent and retaining existing talent, among other methods. It provides a strong environment to incubate and accelerate new ideas through physical space for co-working, a comprehensive assistance network and access to critical support resources, including financial capital.
Christopher Gergen, founding executive director of BCF, is scheduled to present an overview of the study’s purpose and process on May 29.
The study, which is scheduled to be completed this summer, will include a comprehensive asset map and a needs/opportunity analysis, as well as suggested next steps with a proposed budget.
The study will also assess whether office space is available in Pinehurst, Southern Pines and Aberdeen to host specialty incubators, such as technology, health care and military contracting.
Contact Ted M. Natt Jr. at (910) 693-2474 or email@example.com.
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