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North Carolina: Where Is the Job Growth? <br />May 26, 2011 <br />WELLS FARGO SECURITIES, LLC <br />ECONOMICS GROUP <br />The recovery of personal income in the state is directly related to the industries in which job <br />growth is occurring. With employment gains in high income sectors such as business and <br />professional services and financial activities, there is evidence to suggest that personal income <br />gains are not equal across industry sectors. Figure 7 below highlights the long -run personal <br />income growth trends since 199o. These trends help gauge an industry's contribution to output <br />growth for a particular state. Thus, the industries that are contributing most to the state's output <br />will have higher levels of personal income. As can be seen, the high employment growth sectors <br />are also the fastest personal income sectors, growing faster than the state personal income <br />growth. Industries such as farming and government have less than average growth in personal <br />income. <br />Figure 7 Figure 8 <br />North Carolina Income Growth by Industry North Carolina Personal Income Cycles <br />1990 =100 Percent Change from Cycle Peak, Number of Quarters <br />500 <br />450 <br />400 <br />350 <br />300 <br />250 <br />200 <br />150 <br />100 <br />500 12.0% <br />450 10.0% <br />400 8.0% <br />350 6.0% <br />300 4.0% <br />250 2.0% <br />200 0.0% <br />150 -2.0% <br />100 -4.0% <br />12.0% <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 />90 92 94 96 98 00 02 04 06 08 10 0 1 2 3 4 5 6 7 <br />Source: U.S Department of Commerce, U.S. Department of Labor and Wells Fargo Securities, LLC <br />Summary and State Economic Outlook <br />North Carolina's economy has now started down the path of recovery with faster employment <br />growth and a return to pre- recessionary personal income. However, the effects of the recovery are <br />not distributed evenly to all. Those individuals that have traditionally relied on manufacturing <br />employment will continue to face an uphill battle as the evolution of the state's economy leaves <br />this portion of the population behind. This economic evolution toward a higher - skilled workforce <br />will no doubt be a slow and painful transition; however, the long -run prospects of the state will <br />improve ensuring the state of North Carolina will continue to play a significant role in the <br />economy of the nation. <br />The recovery of <br />personal income in <br />the state is directly <br />related to the <br />industries in which <br />job growth is <br />occurring. <br />Those individuals <br />that have <br />traditionally relied <br />on manufacturing <br />employment will <br />continue to face an <br />uphill battle. <br />5 <br />Attachment number 1 <br />1 -1 Page 612 <br />