RALEIGH – While unemployment has soared past 1 million in North Carolina and a recession due to the COVID-19 pandemic continues, the economic outlook for the Triangle is still pretty strong, according to two new reports.
Industry recruiters are staying busy and are hearing a lot of interest about relocating to the Triangle. Even a Fortune 500 company has its eyes on the region. So says Wake County Economic Development.
And the business outlook for office towers as well as other facilities remains strong with the region’s economy poised to make a strong comeback, says Cushman & Wakefield, a national commercial real estate services provider.
NCSU economist Dr. Mike Walden agrees that the Triangle should bounce back from the pandemic, citing several reasons.
“I think the Triangle is much better positioned for the changes that might come in the post-virus world. Mega-metro areas like LA, Chicago, New York, Philadelphia, and Boston will be hurt as people and businesses revaluate the costs of living and locating in a highly dense environment where viruses can spread, particularly one dependent upon mass transit,” Walden tells WRAL techWire.
“While the Triangle has been adding population and density, it is certainly not in the mega-world on these dimensions. Hence, I think that people and companies that still desire an urban living and working experience will easily consider the Triangle, as they also will Nashville, Columbus Ohio, Austin, and Denver.
“The Triangle’s competition will be with these regions. However, the Triangle has the advantage of being on the east coast and of having unparalleled access to three world-class universities.”
New jobs keep coming
The reports and Walden’s comments add to several recent job announcements for the Triangle, ranging from biotech (Grifols and GRAIL) to telecommunications (Bandwidth.com). And other deals are in the pipeline.
“Since March of this year, we’ve had zero projects cancel because of COVID-19, though many have paused until they can better understand how COVID-19 will impact their business,” says Ashley Cagle, the assistant executive director for Wake economic development.
“The stream of projects has slowed but only to what we consider a normal stream of activity, averaging 1-3 new projects a week. Before COVID-19, our highest volume of activity peaked around 2-5 new projects a week in the Summer of 2019.”
Cagle adds that while the numbers may be down the “quality of projects is extremely high.”
“Our active project list contains everything from Fortune 500, Headquarters, R&D and manufacturing spanning life sciences, technology, shared services, and clean technology,” she wrote.
Site visits were balanced among multiple categories with software and information technology inquiries leading the list at eight.
In April 39 projects were discussed with as many as 9,000 jobs. While March included more projects (48), the number of potential jobs was much lower at 5,000.
Commercial real estate update
Cushman & Wakefield’s report examines data from the 2001-2002 “dot com” crash and the 2008-9 “Great Recession” and compares what’s happening now vs. then.
The Triangle is in a “better position today than heading into the Great Recession” due to several factors:
- Economic diversity
- Strong population growth
- Healthy housing market
Also, the firm believes thre region is in “better position than many other major markets,” citing three reasons:
- Favorable business climate
- Strong emphasis on education & skilled labor from area’s 3 Tier-1 research universities
- Robust life science & technology market
Recent comments made on behalf of commercial real estate firm JLL reflect the Cushman & Wakefield’s analysis.
“We have, as a region, become a growth darling in the country,” Gregg Sandreuter, a longtime JLL client, said. “Before, national and international banks and investors and corporate institutional investors would’ve said, ‘It’s too small a market for us to be interested.’ Now they say, ‘It’s exactly where we want to be. How do we get in?’”
And another firm, CBRE, is positive, too.
The Raleigh office of the international firm also says that “office-using employment may be less negatively affected than in recent recessions” even though most companies have ordered workers to work from remote locations due to “stay at home” social distancing orders from state and local governments.
However, Walden says office space demand remains an unanswered question.
“I think the undecided factor in this situation will be the impact of more remote-working,” he says.
“For the tremendous boom in commercial office real estate to be sustained, the Triangle needs not only more workers, but also more workers who will work in offices. If remote working really takes off then some commercial plans may need to be scaled back.”
The Cushman & Wakefield data