DATA & RESEARCH BLOG
4 takeaways from the NC Economic Forecast Forum
“Let’s not talk ourselves into a recession,” was the common refrain at the 2020 Economic Forecast Forum hosted by the North Carolina Chamber and North Carolina Bankers Association. Heading into the tenth year of a slow-but-steady economic expansion – the longest expansion on record since the government started tracking in 1854 – the economists and bankers in the room remained cautiously optimistic about continued growth.
Here are four takeaways from the on what to expect in the next decade.
Population growth is slowing, but the South will continue to boom
Rapid population growth continues to be a hot topic in the Carolinas. Despite national trends showing slowdowns in the birth rate and international immigration, North Carolina and South Carolina were the fourth and eighth fastest-growing states in the country, respectively, in 2019. And we can expect the Carolinas to continue as two of the fastest growing states, and the South as one of the fastest growing regions. In fact, just four southern states - North Carolina, Florida, Georgia and Texas – will account for nearly half of US population growth through 2040. The two Carolinas can expect about 3.2 million people by then and about one-third of that growth will happen in the Charlotte Region.
Inequality could threaten economic growth
We’re a decade into the country’s longest economic expansion on record, but not everyone has seen the benefits. Truist CEO Kelly King opened the day with a call for the bankers and economic development leaders in the room to “visit the other side of town,” if they really wanted to understand how low-wage workers live. King called for reinvestment in K12 educational opportunities prepare the future workforce for more skilled jobs.
King’s call to action is grounded in some concerning data. While high-wage jobs have been growing fast, low-wage jobs have been growing faster. And the type of middle-wage jobs that provide ladders to the middle class have been the slowest segment to grow, according to research from N.C. State economist Michael Walden.
Economic development is more than big business recruitment
The Charlotte Region is coming off one of the biggest years for headquarters recruitment on record. Since November 2018, three Fortune 1000 companies from a cross-section of industries – Honeywell, Dentsply Sirona and Truist – announced moves here.
That’s worth celebrating, not only for the jobs and capital investment those companies will directly create, but also the ripple effect those jobs will have through the regional economy. Still, as EDPNC CEO Chris Chung noted, large-scale business recruitment efforts account for a fraction of net new job growth in the state. Entrepreneurial growth and tourism are also key economic drivers.
The most recent national numbers from the Bureau of Labor Statistics back that up. In the first quarter of 2019, 70 percent of job growth nationally came from companies with less than 250 employees.
Trade policy could boost some industries
The headlines on new international trade policies – both national and international - tend to be mixed depending on industry and region. Economists will continue to study and debate their long-term effects throughout the decade.
The recently enacted United States Mexico and Canada Agreement (USMCA) stands to benefit one important North Carolina industry that doesn’t get much attention, according to N.C. State Economist Michael Walden. The new agreement requires automotive manufacturers to increase the percentage of North American-made parts used to 75% from 62%.
The Charlotte Region, and the Carolinas more broadly, have a competitive advantage in the auto parts supply chain. As Charlotte Regional Business Alliance research shows, more than 16,000 people work in auto parts manufacturing, and the region is home to three times the national average of auto parts manufacturing workers.
Blockchain Beyond the Hype
Since its introduction a decade ago, few things have been surrounded by as much hype as bitcoin and the crypto currencies. Investor speculation in these crypto currencies has captured headlines and led to wild swings in value. Today, the market capitalization of crypto currencies sits at $248 billion.
But crypto currencies are only one application of blockchain - a revolutionary technology that is poised to change the world of business. Joe Fuqua, chief data scientist for Midtown Consulting Group, provided an introduction to "Blockchain: Beyond the Hype" Thursday as part of the Charlotte Regional Business Alliances Data and Analytics Lunch and Learn Series.
While blockchain enables bitcoin and other crypto currencies, the underlying technology has many more applications that cut across all industries. Said simply, blockchain restores trust in untrusted environments. Instead of one central clearing house validating information exchange, a decentralized network of peers validates transactions and stores that information as part of a chain, which in turn can be verified by peers in the network. Bitcoin and other crypto currencies operate on open blockchains, but closed blockchains can allow businesses to create their own digitized validation procedures to improve contracts, supply chains and payments, while allowing access only to necessary partners. One example is shipping company Maersk's TradeLens, which uses IBM blockchain technology to empower multiple trading partners, like shipping agents, banks, port managers and other to share a single view of the supply chain.
Companies in the finance, HR, staffing, Internet of Things and health care industries have also implemented blockchain solutions. In health care, blockchain, paired with other technological advances such as artificial intelligence, holds potential for early disease detection by integrating data from across the spectrum of providers from doctors, radiologists, lab techs and researchers.
Blockchain is still in its infancy, and there are many more applications to come.
54 Charlotte Region Companies Make INC 5000
Tech and construction-related businesses are growing fast in Charlotte, as the 2019 INC 5000 list released Wednesday confirms. Of the 54 Charlotte Region companies that made the list this year, 15 are software or IT services-based and another 11 are in construction. A glance at the top 5 companies shows the diversity of successful companies in the region.
- Power Home Solar, a Mooresville solar construction company at 100.
- Clean Juice, an organic juice bar chain based in Charlotte at 431
- Saprex, a Gaston County specialty composite fabric maker and R&D operation at 489
- Levvel, a Charlotte tech consultancy at 559.
- Printful, a Latvian-owned custom printing business at 564.
Fintechs AvidXchange (2,243) and Passport (832) as well as analytics company Tresata (1,729) also made the list, while Kingsmen Software (1,601) was a newcomer in the tech category. Hickory logistics company Transportation Insight (3,596) made the list for the 12th year in a row.
Marketing consultancies Bespoke Sports and Entertainment (1,574); Union (2,419); and Scott Brown Media Group (3,189) were among three Advertising and Marketing companies to make the list this year. That's up from just one marketing company on the list last year and further evidence of Charlotte's rapid growth in the Marketing and Public Relations field. Alliance research found Charlotte to have the fastest-growing sector in the country since 2001.
Check the interactive map below for more details on Charlotte Region companies that made the list.
Global Growth: One Company at a Time
Exciting news for the Charlotte region this week when Printful, a custom on-demand printing company, announced a new 53,000 sq. ft. facility in Charlotte that will create 100 jobs. Printful’s expansion underscores the growth of e-commerce and Charlotte’s strategic location for international companies in the U.S.
Printful was the first Latvian company to open in the region and it’s already outpaced the 200 HQ and manufacturing jobs it announced in 2016, employing 300. The addition of 100 distribution jobs come as the logistics and distribution industry continues to grow in the region.
Visit here for more insights on the region’s 1,000+ international business.
More Charlotte companies make INC 5000
More fast-growing companies are calling Charlotte home. Fifty-two Charlotte-area companies made the INC 5000 list in 2018. That’s up from 44 in 2017.
The list ranks companies by their three-year revenue growth rates.
Software developers such as Passport and PCI Group as well as technology consultants such as Levvel and Cloud Genera are prominent on the list, one indicator of Charlotte’s booming tech talent sector.
Other well-represented sectors on the list – construction, restaurants and building services – relate to Charlotte’s rapid residential and commercial growth.
Take a look at the interactive map below for more details.