RESEARCH TRIANGLE PARK – North Carolina ranked first in two recent analyses that ranked states for their business climate, one by CNBC, and a second by Business Facilities Magazine. And an economist for Moody’s – one of the world’s top financial analysis firms – says the state continues to perform well midway through 2022, building on a year that delivered those stellar rankings.
Those two are just the latest accolades earned by the state, which earlier this year was awarded the Prosperity Cup by Site Selection Magazine, for the state’s economic development wins during the previous year.
Then, the calendar turned to 2022. First, Boom Supersonic announced it would invest in an aerospace manufacturing facility in Greensboro. Then, VinFast announced it had selected a site in Chatham County to construct a $4 billion automotive assembly and battery manufacturing plant. More announcements continue to be made across the region and across the state.
Through Thursday morning, the North Carolina Department of Commerce website lists 19,882 new jobs announced in 2022, alongside $8.5 billion in investment planned by companies.
Last year, again, a record at the time, had 12,734 announced jobs and $5.2 billion in investment announced at this point in the year.
North Carolina has attractive demographics, businesses want to locate there, and it has a favorable business environment, said Dante DeAntonio, a director of economic research at Moody’s Analytics. “That’s part of what makes it an exciting place.”
“Charlotte and the Triangle area are both incredibly strong,” said DeAntonio. “Triangle is doing a great job attracting investment.”
NC, Triangle insulated from pandemic, economic recession
“North Carolina is holding up incredibly well,” said DeAntonio. “Among the best states when you look at recovery.”
In fact, North Carolina is among the best performing large states, DeAntonio said. “Way ahead of the nation.”
Still, the economic recovery following the onset of the COVID-19 pandemic isn’t evenly distributed in North Carolina’s economy, said DeAntonio, as some industries have added jobs up to and ahead of pre-pandemic figures, while other industries, notably hospitality and leisure, have lagged behind, and haven’t yet recovered in full.
And in the latest month of employment data, released on Friday by the North Carolina Department of Commerce, the news isn’t strong across the board, suggesting that the state’s job market boom may be over.
Challenges in NC economy
The same can be said about North Carolina’s geography, as DeAntonio told WRAL TechWire that the biggest issue that the state will face with regard to jobs and its economy is “probably geographic, not industry-specific.”
Still, the latest month of data from the North Carolina Department of Commerce shows that there was a drop in manufacturing roles in North Carolina. And the data doesn’t factor in the recently announced layoffs and plant closures of two North Carolina facilities along the I-85 corridor, with Medline closing a facility in Salisbury, and an automotive supplier closing a plant in China Grove.
“Charlotte, Raleigh, Durham are doing well and will probably continue to do well, even in a recession, they will weather that recession well, as population growth will help,” said DeAntonio.
“Added benefit of the relocation of companies, in terms of businesses, and in terms of people, and expanding the labor market pool in North Carolina, that a lot of states don’t have,” said DeAntonio.
Impact of migration on housing market
Still, said DeAntonio, growth could place strain on certain sectors of the state’s economy, and in certain regions of the state.
That includes the housing markets, said DeAntonio. The economic growth has “put a lot of strain, and already has put a lot of strain on housing markets, especially in the fastest-growing places like Charlotte and Raleigh and Durham,” said DeAntonio.
While the Triangle ranked 20th in the recent Redfin analysis of the country’s most popular destinations as measured by net inflow, Charlotte ranked 23rd out of 148 regions analyzed.
But, compared to the second quarter of 2020 and the second quarter of 2021, Raleigh’s net inflow has decreased, as has Charlotte’s.
“Both of these metros have a slightly smaller net inflow than the first year following the pandemic, but given that both of these areas returned to pre pandemic levels and not significantly less, I wouldn’t make a big deal out of it,” said Marr.
Slowdown in migration?
According to data from the U.S. Census Bureau that Marr shared with WRAL TechWire, the Triangle didn’t see a dramatic influx in net migration in 2021.
“I’d still bet that migration flows to the region remain stable in the 20,000-plus range,” said Marr, on an annual basis, that is.
But, said Marr, there has been one change in recent months.
“There has been a slowdown in inbound searches with no change in the pace of outbound flows,” said Marr of the Triangle region. “Perhaps the area is getting more expensive and slightly less attractive to outsiders.”
But it could also be that there was an inflated level of searching in North Carolina during the pandemic, said Marr, as millions of people dreamed of relocating for more space. Which might just be more than the number of those who were able to act on those dreams of relocating, he said.