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Charlotte Regional Business Alliance

The Growth Report

Quarterly Report highlighting the region's economic growth.

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The Growth Report

COVID-19 ends longest economic expansion on record

A solid stream of new traded-sector jobs announcements and investments carried the Charlotte Region through early March, including several expansion announcements from manufacturers.

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COVID-19 ends longest economic expansion on record
The Growth Report

Overview

This quarter, everything changed.

A solid stream of new traded-sector jobs announcements and investments carried the Charlotte Region through early March, including several expansion announcements from manufacturers. Paper manufacturer Glatfelter announced the relocation of its Pennsylvania headquarters to Charlotte, adding 50 jobs. In Cabarrus County, General Motors announced a new research and development facility for its racing activities, and Optimized Armor announced a new development in Rock Hill.

On paper, announced capital investment outpaced the first quarter of 2019, thanks to large infrastructure projects like the $91 million Maiden Creek Solar Project in Catawba County. Traded-sector companies announced $323 million in capital investment, compared to only $93.6 million in the same quarter of 2019.

That growth came to an abrupt stop in mid-March as the effects of the COVID-19 began to ripple through the economy. Cautionary measures like restaurant closures and stay-at-home orders shut down much of the service-sector economy.

The crisis ends the record 113-month streak of economic expansion – the longest on record. But it will be months before the true economic impacts of this shutdown of the U.S. economy will be known. A few preliminary statistics give us an early picture of how deep this recession will cut in the Charlotte Region, and the sectors that could help bring us out of it.

More than 362,000 people in North and South Carolina filed initial claims for unemployment insurance during the last two weeks of the quarter, up from around 7,000 the week before. That’s about 5 percent of the all workers in both states. For the Charlotte Region, that is estimated to result in a loss of more than 71,000 jobs during the quarter.

Companies providing face-to-face services, like non-grocery retail, restaurants and leisure and hospitality were hit first. Early estimates showed hotel sales down around 70% while restaurant reservations fell to zero.

Manufacturers were slower to feel the economic shock, but as the end of March neared, supply chain shutdowns and distribution challenges have led to several plant shutdowns. Plants that can shift to medical mask production, such as several textile firms in the Charlotte Region, or ventilator production, could see increased demand, but overall employment in manufacturing is likely to decline.

The opposite may be true for essential services like e-commerce warehousing, groceries, pharmacies and medical devices are likely to increase hiring. Amazon, Harris Teeter and CVS, for example, have announced additional hiring plans.

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Chuck McShane, PhD

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Chuck McShane, PhD

Senior Vice President
Economic Research
704-378-1327