Laserfiche WebLink
May 26, 2011 <br />Economics Group <br />Special Commentary <br />John Silvia, Chief Economist <br />john.silvia(a)wellsfargo.com • (704) 374 - 7034 <br />Michael A. Brown, Economist <br />michacl.a.brown(&wellsfarf- • (704) 715 -0569 <br />North Carolina: Where Is the Job Growth? <br />Economic Overview <br />North Carolina's economy is gradually beginning to build some momentum, but the slow recovery <br />has been characterized by sluggish employment growth concentrated in a few key industries. The <br />personal income situation has begun to stabilize, but not all parts of the income distribution are <br />feeling the benefits of higher income growth. As we mentioned in our December 2010 report on <br />North Carolina, the state continues to face many challenges, as it evolves from a manufacturing <br />based economy to a service and technology based economy. Over the near term, the state's <br />economy will continue to face sluggish job growth with some sectors of the economy performing <br />better than others. The uneven job growth across industries will result in uneven personal income <br />growth across industry sectors. The major headwind for long -term economic growth in North <br />Carolina remains tied to the educational attainment of the state's population. Our regional <br />analysis indicates that some metropolitan areas are experiencing faster job growth than other <br />areas of the state. A regional shift -share analysis provides some insight into the competitiveness <br />in attracting high growth industries within these regions. <br />Figure 1 Figure 2 <br />4.0% <br />3.0% <br />2.0 <br />1.0% <br />0.0% <br />1.0% <br />2.0% <br />3.0% <br />-4.0% <br />North Carolina Coincident Index North Carolina Employment Cycles <br />Three Month Percent Change Percent Change from Cycle Peak <br />4.0% 12.0% <br />10.0% <br />8.0% <br />6.0% <br />-North Carolina: Mar <br />3.0% <br />2.0% <br />1.0% <br />0.0% <br />-1.0% <br />-2.0% <br />-3.0% <br />- 1913 -1975 Cycle <br />- 1981 -1982 Cycle <br />- 1989 -1991 Cycle <br />-2001 Cycle <br />- 2007 -TO -Date <br />12.0 °O /, <br />10.0% <br />8.0% <br />6.0% <br />4.0% <br />2.0% <br />0.0% <br />-2.0% <br />-4.0% <br />-6.0% <br />-4.0% -8.0% <br />80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 <br />4.0% <br />2.0% <br />0.0 <br />-2.0% <br />-4.0% <br />-6.0% <br />-8.0% <br />1 5 9 13 17 21 25 29 33 37 41 45 49 <br />Source: Federal Reserve Bank of Philadelphia, U.S. Dept. of Labor and Wells Fargo Securities, LLC <br />The state's coincident index, a measure that summarizes the current economic conditions of a <br />state, is now beginning to show signs of improvement, after slowing in the last half of 2010. The <br />index signals that a pattern of slow economic growth will likely continue for the next few months. <br />The coincident index tends to capture the behavior of the manufacturing sector of the state more <br />than the service sectors. With the North Carolina service sector now playing a more prominent <br />1 Silvia, J., and Brown, M.A. (December 201o). North Carolina Economic <br />Outlook: Growth. Wells Fargo Securities, LLC. <br />This report is available on wellsfargo.com /economics and on Bloomberg WFEC <br />1 -1 <br />North Carolina's <br />economy is <br />gradually <br />beginning to build <br />some momentum. <br />Together we'll go far <br />rLL SY <br />Page 608 <br />