Economic indicators show WNC’s pump is primed but still waiting to flow
More doom and gloom or a light at the end of the tunnel?
For five years, the nation has waited eagerly for economic forecasters to tell us what we want to hear — that home sales are rebounding, wages are finally rising, and job growth at long last is outpacing layoffs. Will 2013 bring those things at last?
• Haywood County economy outpaces its peers
• College kids gum up Jackson County’s economic stats
We’re often reminded of the bright side: things haven’t gotten worse. “Here’s to an economy stuck in neutral!” isn’t a toast you’ll hear at many New Year’s Eve parties though.
We asked some economists in Western North Carolina to give us their assessment of 2013, along with what economic indicators they typically pay attention to and how the region fits into the bigger national picture.
“Overall, it is continuing to be a very busy year,” said Scott T. Hamilton, president & CEO of AdvantageWest, a regional economic development agency that is part of the state Department of Commerce. “Empirically, we are seeing the numbers changing and jobs being created in various sectors.”
But, his assessment came with the standard caveat.
“It is not happening at the rate anybody would like to see happening,” Hamilton said.
If Tom Tveidt, a research economist and owner of SYNEVA Economics in Waynesville, has one rule of thumb, it’s that all economies are local.
“Economics are really a local phenomenon. The national political arena has tried to spin it that it is a national thing and that they are pulling the levers. But when you look at it, these are all little economies of their own,” Tveidt said.
And one of the biggest factors in how well your local economy is doing can be how rural or urban you are.
“That’s economics 101. Cities always have better economies, higher wages and always do better than rural areas do. Always,” Tveidt said.
That’s one reason the rosier job growth posted in the greater Asheville metro area isn’t being felt in the more rural, western counties.
“You are seeing unemployment coming down faster in some areas than others,” Hamilton admitted. “When you look at the counties around the Asheville area, they have some of the lowest unemployment and the more rural areas like Graham still have very high unemployment.”
While not exactly urban, Haywood County has certainly piggy-backed on the economic rebound emanating from Asheville.
Haywood’s economic indicators look better than its more rural neighbors to the west — enough so that it is now among the top 20 counties in the state economically.
All the counties but one in those coveted “top 20” are clustered around the state’s urban centers: the counties around Asheville, around Charlotte, around Raleigh and around Wilmington.
Haywood is now officially classified in those same ranks by the N.C. Department of Commerce. Around 25 percent of the workforce in Haywood County commutes out of the county, many of which to Asheville, according to some estimates.
“We are connected,” Tveidt said. “It is all about an urban core, and people drive in to work, and then we bring our money back home to our nice little rural community. We have obviously benefited from that.”
Tveidt, in fact, was one of those people, commuting daily from Haywood County into Asheville, until recently when he began running his economic analysis firm from a home office.
Therein lies another economic trend to watch — professionals and entrepreneurs who are creating their own jobs, forging their own way in mountain communities in exchange for the lifestyle the region offers. While the manufacturing sector has lost more than 40,000 jobs in the 23-county WNC region during the past 10 years, small business has gained jobs.
“Entrepreneurial development — people starting their own businesses — has picked up some of those,” Hamilton said.
Diversity has its benefits
Another factor in Haywood’s dropping unemployment compared to its neighbors is a more diversified economy.
Before the recession, Macon County’s employment growth had been concentrated in the construction and real estate industries, while Swain was dependent on tourism. And Jackson was reliant on a huge number of government and institutional jobs — thanks to a university, community college and regional government agencies with their headquarters in Jackson.
But Haywood has a healthier mix of tourism, retail, professional and construction. It also has another ace in the hole: manufacturing. Haywood has historically had a strong manufacturing base. While it lost a few thousand factory jobs 10 to 15 years ago, those that survived the mass exodus of American industry have since held steady — and are now growing.
Haywood has seen existing manufacturing industries bring more than 100 new jobs online.
“Manufacturing is having a comeback,” said Hamilton.
Haywood has also seen more retail growth with the development of a major new shopping center and big-name retailers putting down roots there, from Best Buy to Michael’s craft store.
Meanwhile, Jackson County has lost some of the government and institutional jobs that were so integral to its employment base.
Recession-driven budget cuts led Western Carolina University to cut 90 full time positions during a two-year period from 2009 to 2011, although some were added back this year. More than 30 jobs were lost due to state budget cuts at the N.C. Center for the Advancement of Teaching, a statewide teacher training center located in Jackson County near the WCU campus.
Jackson’s average median income is lower than Haywood’s, possibly due to the glut in the workforce caused by college students willing to work for cheap, particularly in the service sector.
“They certainly compete for those jobs,” said Dr. Robert Mulligan, an economics professor at WCU. “It probably contributes to the wage being lower than if we didn’t have a university here.”
That said, students also bring money and commerce to Jackson County that wouldn’t be here if not for the university.
Another silent population in WNC’s economic landscape that’s hard to measure in empirical data is the second-home owners.
“They are almost invisible,” Tveidt said.
Invisible in the statistics, that is, but not invisible to real life, on-the-ground economies. During their stints in the mountains, second-home owners spend money on everything from haircuts to health care, from auto mechanics to art galleries.
There’s another indicator Tveidt ranks high in his line-up: education.
It’s not a direct measure of economic health, but its correlation is so strong that it is almost a predicator of job growth and wages.
“Education,” Tveidt said. “If you are looking at where you are going to move a company, you look at the educational attainment of the work force.”
Unemployment rates are the crowning, singular indicator of economic vitality, according to Mulligan.
But other factors, such as property values, are all part of the picture, he said. Indeed property values are one of the four measures used by the N.C. Department of Commerce in its economic rankings for counties.
“Property values would indicate that people are earning more, and the demand for housing was going up robustly in those areas,” Mulligan said.
Unlike Tveidt, Mulligan believes the nature of the recovery in WNC will hinge on the national outlook.
“It is going to recover pretty much in line with the state and nation,” Mulligan said.
Top employment sectors in 2011, by number of jobs
Total private industry 12,163
Total government 1,284
Accommodations/food industry 2,000
Health care 1,654
Construction and real estate 938
Professional and technical services, including finance and insurance 908
Arts, entertainment, recreation 303
Total private industry 7,642
Total government 2,900
Educational services 2,007
Accommodations/food industry 1,795
Health care and social assistance 1,752
Construction and real estate 696
Arts, entertainment, recreation 387
Total private industry 8,085
Total government 1,636
Health care and social assistance 1,386
Accommodations/food industry 1,225
Professional and technical services, including finance and insurance 987
Construction and real estate 884
Educational services 840
Arts, entertainment, recreation 354
Total private industry 2,610
Total government 2,289
Accommodations/food industry 967
Arts, entertainment, recreation 341
Educational services 322