The pace of recovery across this state is likely to vary depending on the makeup of the local economy. Recovery is likely to be slowest in parts of North Carolina that are still restructuring, and shifting away from a reliance on legacy industries, such as textiles, that have been shrinking for years. Regions like the Triangle are expected to be among the fastest to recover nationwide, according to the News and Observer’s outlook for recovery in 2011.
With its highly educated population and diverse economy, the Triangle was among the least affected by the recession, losing about 4 percent of its jobs at the peak of the downturn.
“The only metro area in the state that did better was Fayetteville, due to what’s happening at Fort Bragg” and the military expansion, said Michael Walden, an economist at N.C. State University.
The Triangle’s attractiveness is driven by Research Triangle Park and the region’s three major universities – Duke, UNC-Chapel Hill and N.C. State – which produce a steady supply of labor and high-level research. A number of local companies have continued to add workers over the past year, including Red Hat, SAS, Cree and Talecris. Others, such as Research in Motion, Garmin and HTC have recently been drawn to the region by its abundance of engineers.
Still, the Triangle’s unemployment rate has been stuck around 8 percent since May. That’s below the state rate of 9.7 percent but well above the 5.5 percent rate recorded in the Triangle two years ago.
One of the Triangle’s largest employers, state government, has already announced hiring and pay freezes and reductions in purchases and travel. And there’s the strong likelihood of significant layoffs within state government next year as legislators seek to close a projected $3.7 billion budget deficit.
Severe cuts to state and local budgets will hit this region’s economy harder than others, said John Quinterno of South by North Strategies, a Chapel Hill firm specializing in economic and social policy.
Those cuts will come as many private employers continue to look for ways to control costs until the economy revives. Some of the region’s larger businesses, GlaxoSmithKline and Blue Cross and Blue Shield of North Carolina to name two, have announced major cost-cutting initiatives that could result in smaller work forces.
The housing market, a key component in the region’s grown in recent decades, continues to limp along without the help of government tax credits.
See the Charlotte economic outlook in tomorrow’s posting. Read More