RESEARCH TRIANGLE PARK – The greater Research Triangle regions’ economy is the third fastest growing in the country, says a new study from UNC’s Kenan Institute. That’s faster than a No. 4 ranking in 2022. And Kenan’s chief economist Dr. Gerald Cohen cites several reasons for the performance which lifted the Triangle past Seattle but still trailing Silicon Valley/San Francisco and Austin, Texas among the nation’s 50th largest metros.

In fact, the previous edition of the study forecast only 1.6% growth this year across the Triangle.

“The drivers of that acceleration are the strength in economic activity that we have seen to date. In particular employment in the tech sector but also in education and health have been much more robust than expected,” Cohen tells WRAL TechWire.

A wealth of new economic projects which led to North Carolina being named the best state for business in each of the last two years by CNBC is helping drive regional growth. And while job listings are down from 2022 record highs in the tech sector, thousands of jobs remain open with all of the 50 top Triangle companies tracked by WRAL TechWire looking to hire people.

According to the study, the Triangle’s gross domestic product is growing by 3% – down from 3.8% a year ago in an economy hammered by inflation. But Cohen has been forecasting a recession which has yet to occur.

Defining the Triangle differently than Fed data

The Kenan study takes a different view of federal so-called Metro Statistical Area data that splits the Triangle in half. Dr. Cohen explains:

“Our own native region of Raleigh, Durham, and Chapel Hill, NC illustrates this point. While the three cities are highly economically intertwined –and are even collectively referred to as the “Research Triangle” – they are disaggregated into multiple entities by the U.S. Census. Analyzing these cities separately thus fails to capture the extent to which these cities operate as one connected microeconomy.”

Source: Kenan Institute

The recent study is an update of one published earlier this year that tracked the economy in 2022. And Cohen points out in the new report that 2023 has been better than expected. [See interactive map of national rankings here.] It’s based on data from what Cohen calls “Extended Metropolitan Areas (EMAs), which represent U.S. urban areas connected in economically meaningful ways; our current analysis examines the 150 largest EMAs by population.” These contrast to traditional metro statistical areas based on census data that typically divides the Triangle roughly in half.

Overall, the study says metros in general are outperforming expectations with very few seeing a decline in growth.

“The economy has held up better than expected, though we still anticipate a recession sometime over the next year,” Cohen writes in the study.

In a broader study of the nation’s metro statistical area, the Triangle ranks fifth fastest, up from sixth.

Dr. Gerald Cohen (UNC-CH photo)

How to beat Valley, Austin?

But if the Triangle is to move higher its leaders must find ways to surpass San Francisco (3.6% this year) and Austin (3.7% this year)- a formidable task.

“San Francisco is such a dominant force in tech – which is such a high productivity sector – that even with all the challenges they are having, it is hard not to generate strong growth,” Cohen explains.

“Austin benefits from tech with the additional fillip coming from tech companies – worker moving there,” he adds.

But the Triangle has appeal as well.

“The Triangle is also beneficiaries of that trend and based on the growth in the sector that we are saying we could potentially overtake their growth in the next few years,” Cohen notes.

How to improve the Triangle?

Cohen makes three recommendations on how the Triangle can drive more growth “in terms of policy changes:”

  • “Continued investment in places like RTP and similar institutions that bring together researchers and businesses which foster innovation
  • “Investment in education, and in particular places like Durham Tech and Wake Tech which train an important and often unappreciated workforce
  • “Alleviating housing shortages, but doing so in ways to maintain the green spaces that improve quality of life.”