Report: Manufacturing Decline Explains North Carolina’s Lagging Job Creation

Report: Manufacturing Decline Explains North Carolina’s Lagging Job Creation

- in Must Reads


North Carolina’s economy is performing competitively compared to neighboring states and the national average, according to a new report from the Budget & Tax Center, a project of the North Carolina Justice Center. Far from lagging behind, North Carolina is on par with or out-performing surrounding states in nearly every major measure of economic health—except the unemployment rate.

North Carolina’s higher unemployment rate than neighboring states is due to comparatively greater over-reliance on declining manufacturing industries compared to surrounding states, not due to perceived weaknesses in the state’s business climate, the report finds.

“Contrary to the claims of some policy makers, we’re experiencing some of the fastest economic growth in the region, but we’ve struggled to create enough jobs to remain competitive in bringing down unemployment—largely due to the long-term reliance on declining manufacturing industries,” said Allan Freyer, Policy Analyst with the BTC and author of the report. “It’s clear that supporting new, high-growth industries through job training and infrastructure is a far better strategy than tax cuts for addressing manufacturing decline and improving job creation.”

The report’s key findings include:

•    North Carolina is in the middle of the pack compared to neighbors Georgia, South Carolina, Tennessee, and Virginia in every major indicator of economic health—including poverty, median household income, and per capita gross domestic product (GDP) growth. The only indicator in which North Carolina noticeably lags its neighbors is unemployment.

•    North Carolina’s higher unemployment rate is due to much greater reliance than neighboring states on declining durable and non-durable goods manufacturing industries prior to the recessions of 2001 and 2007. In 2000, more than 16 percent of North Carolina’s employment was concentrated in manufacturing, the most of any surrounding states.

•    North Carolina lost almost 42 percent of its manufacturing employment between 2000 and 2011, greater than the loss experienced by any other neighboring state.

•    If North Carolina’s share of total employment in durable and non-durable goods manufacturing had resembled that of the nation as a whole, the Tarheel State would have 108,000 more jobs today than currently exist, and the state’s unemployment rate would likely be similar to neighboring states.

Read the full report at this link.

Above image of textile mill is in the public domain.