Sunday, April 21, 2024

Economist Jim Kleckley’s reflections after a storied career

Economist Jim Kleckley is retired from East Carolina University now, as of last summer. Which is good for him, not so good for the rest of us. For years, he has been a go-to guy for reporters trying to make sense of the latest data on jobs, or to get a forecast of the year ahead, or whatever.  He is a patient, clear explainer.

He is working part-time now for the state’s Pandemic Recovery Office, helping to keep track of how all the money is being spent and how we’re doing. He calls it “kind of an advisory committee” for the office. (He asked me to make clear that our conversation would represent his personal views, and had nothing to do with his advisory role. Noted.)

Kleckley has been a well-known voice on the state of North Carolina’s economy for years.  I talked to him last week because he is a regional economist who knows about the money supply, sure, but also about how much money is being spent at local car dealerships.  And I also wanted to talk to him about his career.

Jim Kleckley

Over the years, he has spent a lot of time on the road, talking to business and civic groups all over Eastern North Carolina and beyond. He has a Ph.D. from the University of South Carolina, but his interactions with the business community continued his education.

He recalled the many talks he gave to Outer Banks chamber of commerce folks about the economic outlook.  For his first presentation, it was what he described as “My standard, ‘This is how you’re growing, blah, blah, blah, blah, blah.’” And their question – which I guess I should have anticipated, but didn’t – they wanted to know what the growth was in Virginia and D.C.

“And [I] ended up doing more detailed studies,” he says. Nearly half  the property owners in Dare County are from out of state, “and most of them are from somewhere up north.”

“And you start thinking about those things,” says Kleckley.  “Their ties and their thoughts in these local areas really are particular to that local area.”

Some background

A Charlotte native, Kleckley grew up mostly in Columbia, SC.  After graduating college, he got a job as director of research for the Municipal Association of South Carolina, a lobbying group for cities and towns.  Because a lot of small towns didn’t have the resources to gather and analyze economic data, he was helping them.  “So, one day, I was thinking, well, you know, I think I want to be a regional economist,” recalled Kleckley. “Lo and behold, all of a sudden I was in graduate school.”

After working as a consultant for a dozen years, he moved to North Carolina in the late 1980s, and eventually joined the faculty at ECU, where he taught and was director of the university’s Bureau of Business Research.

Local Leadership

In talking to local business and civic organizations, Kleckley wouldn’t just give them forecasts and numbers, he would also be giving a pep talk. They had some control over their destiny. A lot of his presentations were in rural counties that were struggling, particularly in Eastern North Carolina.  He would tell them that local leadership could make a difference by working together as a region. A lot of what affected their markets was determined by larger forces, the national and global economy.  But, he says, they could influence decisions at the state and local level that would have an impact.

One example is the proposed Interstate 87 that would run from Raleigh up to the Norfolk area and its ports. Regional organizations in the eastern part of the state have been lobbying hard for this upgrade to U.S. 64 and U.S. 17.

“My big thing for many years,” says Kleckley. “If you want to develop northeastern North Carolina, you have an interstate highway from Raleigh to the port of Norfolk, which looks like it’s finally going to happen.”

He recalled a project he worked on as an example of what happens when a region doesn’t pull together.  The ports in Savannah, Ga., needed to expand, and one way to do that was to go across the river into South Carolina. “You would have thought both states put cannons on both sides of the Savannah River and started shooting at each other.”

“The South Carolina ports didn’t want anything to do with it. The Savannah ports didn’t want to do anything with it. And they just couldn’t make it work,” says Kleckley.

He contrasted that with the approach taken to land an NFL franchise in Charlotte, which basically drew a circle around the metropolitan region into South Carolina counties and said this is the market, north and south of the state line. “It’s not the North Carolina Panthers,” he says. Owner David Tepper is moving the team’s headquarters and practice facilities across the line to Rock Hill, S.C. “Which makes all the sense in the world.”

Pieces and parts

From Greenville, he saw the Apple announcement that it will bring 3,000 jobs to Research Triangle Park, average pay $187,000, over the next dozen years. Jobs in Tier 1 counties, the most economically distressed, have averaged around $43,500 and Tier 2, around $49,000, according to the corporate projects announced by the state over the past five years.

“If I look at the old books that I was reading in graduate school, it’s the same thing. If you want a skilled workforce, you go where the skilled workforce is,” says Kleckley.  “So, the areas like Charlotte and the Triangle all have advantages over the rest of us. So, what the rest of us have to do is somehow figure out how to get pieces and parts of that.”

And the experience of the past 15 months may actually provide an opening for that. One vulnerability the pandemic exposed was the fragility of a global supply chain, particularly one anchored in China, which may not be exactly our enemy, but is not our friend.

“I think you’re going to relocate a lot of industry that’s gone offshore in the last 20 and 30 years back to the States. The pandemic kind of brought that out in many ways. More than healthcare dealing with supply issues. The car companies can’t get chips to make the cars.  I think here’s an opportunity for the Tarboros and Rocky Mounts and Kinstons and Goldsboros, and probably towns in the western part of the state you can name to take advantage of.”

These are the places that know how to make things. Companies looking to manufacture products that ship by truck or rail typically go to rural, lower-cost communities with ready-to-go sites and an affordable workforce.

But Kleckley also sees the telecommuting trend favoring the less-urban areas. For one thing, the difference in real estate prices is substantial. His son works for a Charlotte bank, and just bought a house. “They paid more for that house in Charlotte than my house here in Greenville is valued, and it’s a third the size.” He laughed.

Checking car sales

I mentioned car sales up above because Kleckley is the fellow who would get a call when the latest numbers came out. In 2016, he told a Greenville television reporter that when the economy is doing well, it usually shows up at the dealerships, so watch the cars.

And so, I checked with the NC Department of Revenue, which knows sales because it collects taxes.  In February, 2020, the monthly sales from dealers were $187.2 million.  By May, they fell to around $137.3 million, a nearly 27% drop.  This past February, they were back up to $180.2 million. So I guess things are better.

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