NC economy leads the pack

Outpacing peers, state climbs in economic, business rankings

RALEIGH — North Carolina is one of the nation’s fastest growing economies, with it’s GDP having grown more than 15 percent since 2013, according to U.S. Bureau of Economic Analysis. However, it is changing. While military and agriculture are still critical to the state’s economic success, we are now on the leading edge in industries like of aviation, pharmaceuticals and small business startups, but with a distinctly southern accent. As the Great Recession peaked, N.C.’s unemployment rate was among the highest in the nation at 10.7 percent. Now it is one of the lowest at 4.6 percent, outpacing its Southeastern peers and the nation as a whole.Gross domestic product (GDP) in the state, a measure of the state’s total economic output, is projected to reach $510 billion for fiscal year 2016, representing a gain of more than $100 billion since 2010 and making it the 23rd largest economy in the world, between Taiwan and Sweden.In the last year, retail sales have climbed by more than $670 million according to the N.C. Department of Revenue, and applications for residential building permits have climbed nearly 15 percent over the same period.Associated with that growth, of course, is job creation. Since September 2015, nearly 75,000 jobs were added in North Carolina.With a September unemployment rate of 4.6 percent, North Carolina bests the national average, but the rates are hardly consistent from Murphy to Manteo. At the top of the list, according to the Labor and Economic Analysis Division (LEAD) of the N.C. Department of Commerce, are counties like Wake, Buncombe, Dare and Henderson, all with rates significantly below the state average.A handful of counties, though, suffer with unemployment nearly twice the state average, such as Scotland County’s 8.8 percent, and Edgecombe County at 8.5 percent. Recent developments, such as the CSX inter-modal hub coming to Rocky Mount and Sanderson Farms investments in Robeson County, may transform the economic fortunes of these impoverished areas.Secretary of the N.C. Department of Commerce John Skvarla points out the state has a large inventory of such projects.”Our economic development pipeline is chock-a-block full,” exclaimed Skvarla. “It’s not tens, it’s not dozens; it’s hundreds of active projects.”According to Skvarla, many of those projects are in the most economically depressed counties.”Roughly 15,000 new jobs were created last year through our incentive programs,” said Skvarla. “7,500 were in tier 1 and tier 2 (most impoverished) counties.”Despite the increasing importance of the service sector to our economic growth, North Carolina is still strong in manufacturing, even with the shrinking footprint of textiles and tobacco in the state.”We are now the most diversified manufacturing state in the Southeast,” said Skvarla, noting North Carolina boasts more than 460,000 manufacturing jobs which account for more than $88 billion in annual production.And though large corporate economic development announcements like CSX and Sanderson Farms grab headlines, Skvarla acknowledges that it’s the small business owners and entrepreneurs that really make the biggest impacts on the state economy.After losing his job in the 1970s Brad Kemmerer, an electrical engineer from Greensboro, started ABCO Automation in his garage in 1977 to provide creative automation solutions for manufacturing inefficiencies. The company now employs 130 people and serves clients like Pfizer and RJ Reynolds, generating more than $30 million in annual revenues.”They are the essence of North Carolina,” said Skvarla.Small business truly is the state’s economic backbone, employing nearly half of the state’s workforce and comprising 98 percent of its enterprises.North Carolina’s recent focus on creating an environment to cultivate such entrepreneurial ventures — by lowering corporate and personal taxes as well as reducing regulations — has been recognized by the likes of Forbes, CNBC, Site Selection Magazine and more, deeming the Old North State one of the best business climates in the country.That environment has acted as magnet for migration to the state. Last year, North Carolina was the No. 1 growth state based on U-Haul rental destinations.The industries in which jobs are being created can make a big difference in the state’s per capita GDP, and the state enjoys a healthy mix of goods-producing and service-oriented enterprises. At $49,025 in 2015, North Carolina’s per capita GDP is below the national average by more than $5,000, but recent trends in wage growth show the state closing this gap.Brent Lane, director of the UNC Center for Competitive Economies at UNC-Chapel Hill, performed research for the N.C. General Assembly that found North Carolina has strung together 10 consecutive quarters of per capita income growth at or above the national average.That trend may be poised to continue as the Bureau of Labor Statistics (BLS) projects North Carolina will add 500,000 jobs by 2024, outpacing population growth, with jobs paying more than $75,000 projected to grow faster than those paying less than $30,000.The one worry Skvarla has? International developments.”I don’t worry about North Carolina at all,” assured Skvarla, “but their could be a world economic contraction.”Though North Carolina’s economy is gaining and growing, national and international connections make it impossible to insulate the state’s economy from outside influence. That adds even more importance to elections as voters decide who’s best to navigate the cruising economic ship through potentially stormy waters in its path.