Why the Charlotte Region May be at Higher Economic Risk than other parts of the U.S.
Predictions of recession are becoming commonplace as the world continues to deal with the effects of the COVID-19 pandemic. Record-setting jobless claims are expected to occur throughout the country. However, certain industries and therefore certain areas of the country which concentrate those industries, are most vulnerable to the damage of the pandemic. Using methods from Mark Zandi, chief economist at Moody’s, as well as The Brookings Institution’s Metropolitan Policy Program, we looked at how relatively vulnerable the Charlotte region* is to the economic effects of the pandemic. Zandi identified 5 industries that were most vulnerable to the effects of COVID-19: leisure and hospitality, travel arrangements, employment services, transportation, and mining. We then took Brookings method of looking at these industries in the top 100 metros to see their share of employment across the country. Here are the key takeaways of the analysis:
- The Charlotte region has a higher share of employment in high-risk industries than the top 100 metro average (18.3% vs. 16.3%). This is driven by a relatively high share of employment in employment services, leisure and hospitality, and transportation. The region is a destination for entertainment and business which drives the leisure and hospitality sectors while the strength of Charlotte-Douglas International Airport and our logistics sector drives the high relative share in transportation. The high share of employment services is driven by a high number of temporary workers to support growing industries around the region.
- Of the top 100 metros, the Charlotte region had the 20th highest share of employment in high-risk industries.
- Metros with expansive leisure and hospitality industries are more vulnerable to the effects of COVID-19. The 3 metros with the highest share of leisure and hospitality workers also have the highest share of workers overall in high-risk industries.
- The southeast seems to be especially vulnerable to the effects of COVID-19. When looking at the map below, the top 20 metros with a high share of employment in at-risk industries are primarily in the southeast while older manufacturing hubs in the northeast, and tech hubs on the east and west coast are in the bottom 20 metros.
- Neighboring metros of Raleigh, Durham-Chapel Hill, and Columbia, SC are all below the top 100 metro average due to lower shares of employment in transportation and leisure and hospitality.
The share of employment in high-risk industries vary widely from 33.8% in Las Vegas, NV to 11.4% in Provo, UT. Given the high numbers of workers in high-risk industries and the variance across metro areas, it is important that the strategies to help support businesses and workers are meaningful and localized to meet the needs of the community.
*For comparison purposes we used the Charlotte MSA geography which does not include Cleveland County, Chesterfield County, Stanly County, Catawba County, and Alexander County which the Alliance represents.
Sources: Zandi, “COVID-19: A Fiscal Stimulus Plan,” March 2020. The Brookings Institution, “The Places A COVID-19 Recession Will Likely Hit Hardest”, March 2020. Charlotte Regional Business Alliance analysis of EMSI Data
Posted by: Antony Burton, Vice President, Economic Research @ 3:00:00 pm