RALEIGH – North Carolina’s capital city is the fifth best job market in the United States, a new national study shows, and a lot more growth could be coming its way based on what leaders at Wake County Economic Development are seeing.
Coming off a record year in jobs and company recruitment in 2022 for North Carolina, Raleigh remains on the target list for billions in investment despite an economy slowed by inflation, labor shortages and rising interest rates.
“The economic development pipeline remains very strong with opportunities focused on advanced technology industries such as life science and advanced manufacturing,” Michael Haley, director of the Wake development operation.
“We are currently leading 38 active projects with over 14,000 associated new jobs and $8.4 billion in potential capital investment.”
Raleigh’s workforce has increased nearly 4% – with technology jobs and positions in leisure/hospitality both up nearly 9% year over year, according to N.C. employment data. The surge in jobs is one of the significant reasons Raleigh ranks fifth in the study published over the weekend by the Wall Street Journal. Data was provided by Moody’s, a leading economic data organization.
Michael Haley, executive director of Wake County Economic Development and senior vice president at the Greater Raleigh Chamber of Commerce.
Tom Snyder, director of the growing internet of things tech users group called RIoT that’s based in Raleigh, isn’t surprised by the findings in the report. And he salutes the leaders drive Raleigh forward economically.
“Absolutely this is positive for the region and a reflection of the quality of life, cost of living, variety of amenities and diversity of industry in Raleigh and the Triangle,” Snyder explains. (Among smaller cities, Durham ranked 35th.) “Any time you are in the top 10, much less the top 5 in a national ranking means you are operating in world-class manner.”
Not to be overlooked for future development is Raleigh-based First Citizens Bank’s acquisition of Silicon Valley Bank – a global source of venture capital and technology investment before its collapse last month. Representatives of First Citizens were “on the ground” in San Francisco the day the deal was announced, looking to recruit and retain SVB talent. Investment capital has never been abundant in the state. Tat could change and help the state’s startup community which since the pandemic has been producing record numbers of new companies, according to state data.
How Raleigh ranked by category in the study:
- Overall rank: 5
- Unemployment rate rank: 14
- Labor force participation rank: 7
- Payroll change rank: 15
- Change in labor force size rank: 2
- Change in average weekly wages rank: 22
Haley’s team will likely be touting the report’s findings in meetings with potential clients.
“I find the reports such as the one in the Wall Street Journal about the nation’s strongest job markets encouraging in that they help to convey the strength and dynamism of our local economy,” he says. “Two of the most important fundamental, underlying strengths of our market is our talent and the diversity of our economy. We have one of the most educated and skilled workforces in the nation with nearly 47% of the population having a college degree or more. That talent is able to take advantage of the wide array of job opportunities our local economy has to offer.”
Not all the jobs data right now is as strong with tech-sector layoffs, fewer job openings and executives’ cooling expectations for 2023. But for now, these thought leaders like what they are seeing.
Dr. Anne York
Inside the numbers
Meredith College economist Dr. Anne York says the data provides a “very favorable situation” for Raleigh when economic developers are out and about the world trying to land more jobs to further grow the economy not only in Raleigh but the Triangle and the state.
“I compared the ranking numbers on the top five cities and noticed this pattern,” York tells TechWire.
“In examining the rankings of the top five areas, there are a few facts that are interesting. For the five attributes on which they did the rankings, among the top five MSAs, Raleigh comes out as 3rd or 4th highest in the unemployment rate rank, labor force participation rate rank, and change in payroll rank. But we are the highest rank for the change in the labor force size and then the lowest rank among these top five cities for change in average weekly wages.
“Our 22nd overall ranking on this last attribute is well below the rankings of the other top five cities. That is a very favorable situation for Raleigh because it means we have had lower wage growth and so businesses in our region have less pressure to raise prices. That is, our cost of living is favorable in this time of a highly inflationary economy.
“The large change in the size of our labor force is very favorable for businesses because it means they will find workers, given that the economy is still recovering from the very large drop in the LFP [labor force participation] rate due to the pandemic. In sum, I think these rankings show how favorable the Raleigh area is for businesses to relocate and to expand.”
Dr. Mike Walden
N.C. State economist Dr. Mike Walden concurs with York on several points.
“I am not surprised by the ranking for Raleigh – and I suspect most residents of Raleigh would not be surprised. This is just another confirmation that the Raleigh region is one of the fastest growing in the country,” he says.
“Several factors are behind this, including competitive costs compared to other large metros, a pleasant climate, “room to grow,” and high quality universities that can supply a constant flow of workers qualified for tech, finance, and related jobs. A larger region gives residents more job opportunities, companies more opportunities for expansion, and consumers more access to a wider range of products and services.”
Then there is the negative.
“Of course,” Walden says “there are downsides to this growth, particularly in higher land and housing prices and increased traffic congestion.”
Comparing other regions
Top spot in the study went to Nashville followed by Austin, Texas – both rivals in competing for economic projects as well as talent recruitment.
Nashville ranked first overall, sixth in unemployment, third in labor force participation, sixth in payroll change, ninth in change in labor force size and fifth in change in average weekly wages.
Austin, second overall, ranked 18th in unemployment, first in labor force participation, fourth in payroll change, seventh in lchange in abor force size and 13th in average weekly wages change.
Charlotte came in eighth place.
Tom Snyder, RIoT executive director
Raleigh vs. Austin
If Raleigh has a rival for economic recruitment akin to Duke and Carolina in basketball, it’s Austin. So the Texas capital ranking just about North Carolina’s seat of government is fodder for discussion. Snyder recently visited Austin where he was a speaker at the South by Southwest (SXSW) tech and entertainment festival – one of the nation’s premier showcases.
“The cities are quite similar. Austin has a stronger focus on entrepreneurship (and budget for it) than Raleigh does, and Austin has a few years head start in drawing corporate offices from California to Austin,” Snyder explains.
Maybe, he says, the tide is shifting/
“But Raleigh is quickly gaining steam with California expats and has a stronger university system and talent pipeline than Austin. Raleigh is quickly catching up in access to investment capital.”
And he stresses a point that isn’t listed often when talking about economic dvantages.
“For those thinking long term, Raleigh has significantly better access to drinking water – something rarely considered in corporate location selection,” he says. (The state’s ample water did help land a new semiconductor plant from Durham-based Wolfspeed.)
Yet Raleigh needs to step up its game – perhaps with more events like last weekend’s Dreamville.
“Austin does a much better job of storytelling, both from a tech perspective and with tech-adjacent activities (such as) SXSW,” Snyder notes.
Haley, on the other hand, didn’t get into the Raleigh-Austin debate.
“The Raleigh metro continues to be a beacon of economic opportunity,” he says. “Our region’s dynamic economy, thriving innovation culture, and education ecosystem will continue to drive prosperity.”
Study methodology
Methodology for the study as published in the WSJ: “Rankings are based on five attributes: average unemployment rate throughout the year; yearly labor-force participation rate; change in the average monthly employment and labor-force levels from a year earlier; and the change in average weekly wages, not adjusted for inflation, in the first half of the year from a year earlier, reflecting the latest available wage data. Each attribute was ranked, and those rankings were added together to create an overall score. Rankings were split between areas with 2021 populations of either less than or more than one million. Moody’s Analytics analysis of Labor Department data.”
