It’s the season for economic forecasts of the New Year, and 2016 is looking pretty good for the Triangle, according to two economists at Wells Fargo. Look for “strong gains” with growth in tech and biotech leading the way.
“Raleigh’s economy should continue to see strong gains in the year ahead, led by growth in the region’s key information technology and biotechnology sectors,” wrote Mark Vitner, Senior Economist, and Misa Batcheller, Economic Analyst.
“The Triangle remains one of the nation’s most affordable tech hubs and is widely viewed as an excellent place to do business.”
The regional report is part of a relatively rosy forecast for the entire state with jobs expected to grow by well over 100,000,
But of particular interest in our neck of the woods is what’s happening around Capital City.
To say Vitner and Batcheller are positive is, well, quite true.
“Raleigh businesses continue to add jobs at a healthy pace,” they wrote.
“Nonfarm employment has risen 2.1 percent over the past year on a three-month moving average basis. While employment growth has slipped from the 4.0 percent year over year growth levels seen earlier in the year, Raleigh’s labor market fundamentals remain on track.”
When looking at job growth, economists focus on how the best-paying ones are performing, such as professional, bsuiness and technical services.
So what does the Wells Fargo duo see in RTP?
“The greatest payroll growth on an annual basis has been seen in professional & business services,” they note.
“The industry has added 2,700 net new jobs over the year, a large majority of which have been in the professional & technical services subsector.”
Information servers job growth has been particularly strong at around 4 percent.
Plus, health and education services are surging.
The duo pays particular note to the high-tech sector, but calls the region “Raleigh” as opposed to the Triangle.
“Raleigh, home to Research Triangle Park, continues to be one of the nation’s fastest growing tech centers,” the point out.
“Recent tech developments in the area include drug-developer Novo Nordisk’s plan to build a second manufacturing plant in Johnston County. The $1.85 billion investment is expected to create about 700 high-paying jobs over the next five years, doubling the company’s footprint in the area. Fidelity Investments recently announced plans to add 600 information technology jobs at its Research Triangle Park campus over the next three years.
“Additionally, almost $14 million in new funding was approved for Research Triangle Park’s Biotechnology Center.”
For the biotech sector, the funding is particularly important. The Biotechnology Center leadership fought desperately to keep from being “zeroed out” in state funding. Their efforts paid off. Biotech and life sciences make up one of the strongest performing sectors in the economy despite recent layoffs at GSK and other firms.
North Carolina in general remains highly reliant on manufacturing, and the Wells Fargo report notes that “Raleigh has successfully reduced its exposure to manufacturing, manufacturing and mining have weighed on growth over the year as both industries continue to report job losses.”
Caterpillar has been a big success story on the manufacturing side, but they note the company recently “confirmed it will eliminate 80 jobs at its Franklin seal manufacturing plant, with the first round of cuts beginning in January 2016. This marks the first significant round of job cuts to affect Caterpillar’s North Carolina operations.”
Now, what does the growth mean for housing? Good news for sellers – and apartment builders.
“Raleigh’s housing market has ramped up over the year. Single- and multifamily permits have made marked gains since the recession” they said. “A majority of the growth can be attributed to the metro’s expanding apartment market, which has added over 3,000 units since the start of the year.”
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