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Tuesday, April 23, 2024

Abernathy projects steady Carolina Core growth

It is worth showing up for an event when Ted Abernathy is the main speaker. Abernathy, who used to run the Research Triangle Regional Partnership and also led economic development for Durham, is managing partner of Economic Leadership, a Brunswick County-based consulting firm with clients around the country. Last week, he was in High Point, talking to the Piedmont Triad Partnership about the state of the region’s economy and the outlook for the next year and the next decade.

The folks who live in the 12-county PTP region are used to keeping a close watch on the economy, because their economy has changed a lot over the decades, for better and worse. The region’s traditional industries – textiles, apparel, furniture and tobacco – were hammered by global competition and automation.  But new industries emerged, like aviation, electric vehicles, biomedical and life sciences, and logistics. Especially logistics, because the Triad has one of the best interstate networks in the country, giving it access to more than half the U.S. population within 650 miles. It is a good place to ship product in every direction.

Ted Abernathy

That was mentioned by one of the speakers at last week’s event at the Congdon YardsDavid Congdon, executive chairman of Old Dominion Freight Line of Thomasville. It is one of the region’s premier business success stories, with more than 23,000 employees nationwide and $6.3 billion in revenue last year, up 19.1% from 2021.

The business was started 89 years ago with $1,700 his grandmother had saved up, and his grandparents bought a truck to make runs between Richmond and Norfolk. The company relocated to North Carolina in the early 1960s, and grew with acquisitions and the deregulation of trucking.

“This was a prime East Coast location,” said Congdon.  “We are blessed with five interstate highways.” The region has access to multiple ports, he said, and “you’ve got all the trucking services you can imagine. We’ve got all our universities and community colleges, technical schools. We’ve got everything we need to support business, industry . . . In my view, we are simply a center for global logistics for the state of North Carolina.”

The Carolina Core

The region’s logistical advantages are one reason that it will likely continue growing over the next decade.

David Congdon

Abernathy, in his presentation, focused a lot on the Carolina Core, a 19-county region that runs more than 120 miles from west of Winston-Salem down to Fayetteville and the Sandhills. The folks who lead the PTP have branded the Core as the next big region in North Carolina, legitimately so. The Core’s counties are on both sides of U.S. 421, which is destined to become Interstate 685. The Carolina Core is the economic development region that has seen some of the highest-profile job announcements – The Boom Supersonic jet plant at Piedmont Triad International Airport outside Greensboro, Toyota’s battery plant  in Randolph County, Wolfspeed’s silicon carbide wafer plant and VinFast’s electric vehicle plant in Chatham County.

The Carolina Core has seen its population grow by more than 150,000,  6.1%,  over the past decade, a little slower than the 8.2% state average, Abernathy noted. The fastest-growing county was Chatham, at 24.3%, and that is with VinFast and Wolfspeed still being built and the massive Chatham Park residential development near Pittsboro in its early stages.  Growth in the Core has been a little uneven, with seven counties losing population. Rural counties, for the most part, are struggling to retain population and prime-age workers.

The next decade

Looking ahead, Abernathy shared a chart showing the growth in the 10 years from 2022 to 2032.  Growth is projected to be slower, he said, 4.2%, in line with the 4.6% statewide.  One reason is the continuing decline in the number of kids.  “Our fertility rate continues to drop.  It was 3.7 [in 1960]. It’s now 1.6.”

The 107,000 additional folks in the region will not be evenly distributed.

Five counties will see double-digit growth: Chatham (17.2%), Lee (15%), Alamance (12.4%), Moore (11.8%) and Davie (10.2%). Two counties will see double-digit losses: Montgomery (-13.3%) and Wilkes (-12.9%).

The challenge the state faces could be seen in another chart – the projected 25-64 population – the working-age population – over the next 10 years. The chart had light green for growth below 10%, dark green for above 10%, and red for population losses. As a whole, the state is projected to grow 3%. But that’s because of around 40 of the state’s 100 counties that will experience growth. The urban crescent from the Raleigh-Durham metro to the Triad and down to Charlotte was mostly light and dark green. So were the Asheville-Buncombe metro, several southeastern counties like Brunswick, and the Outer Banks and border counties across the line from Hampton Roads. The rest of the state was mostly red on Abernathy’s slide.

“Many rural counties will lose working-age population,” said Abernathy. “More than half the counties aren’t projected to grow. That has long-term impacts.” For example, there could be labor shortages in key sectors.

“If you don’t have teachers for kids in schools, you’ll notice.  If you don’t have a nurse in the ER, you’ll notice.”

Having a good workforce is crucial to recruiting businesses. And the challenge for counties that face declining working-age population is to figure out strategies to attract workers, he said.

Here are some of the other highlights of Abernathy’s presentation:

  • Nonfarm employment growth over the past year has been 2.6% in North Carolina, compared with 2% in the U.S. Every N.C. sector has gained jobs except manufacturing (-0.4%) and construction (flat). Leisure and hospitality has been the fastest-growing, 6.4%, vs. 4.5% US.
  • The Piedmont Triad Partnership metros saw job growth over the past year of 2.3%, vs. 2.6% statewide. In the broader, 19-county Carolina Core, the growth was 24,250 net jobs added. Chatham and Person counties added the most, 3.2%.  All but four counties in the state either gained jobs or saw little to no change.
  • Most of the counties in the Carolina Core are running at between 3 and 4% unemployment. “At least when I went to school, 4% was considered full employment, somewhere between 3 and 4%,” said Abernathy.
  • “Here’s one worth having a conversation about,” said Abernathy, about the level of multi-family housing in the region.  Over the last four years, the Charlotte region authorized more than 39,500 privately owned multi-family housing units. Raleigh-Durham authorized more than 41,100. The PTP counties authorized 8,905.  Young people who need housing often start with apartments, and one of the keys to attracting and sustaining a workforce is housing.
  • Abernathy predicted a slowdown in 2024 as consumers use up excess savings, rising interest rates continue to impact home building, and rising energy prices and tighter bank lending weigh on the economy.

 

 

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