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.
Posted by: Chuck McShane - Vice President, Research @ 12:00:00 am