North Carolina Needs Clear Cut Economic Development Policy
Last week prominent NC State Economist Dr. Michael Walden issued a report showing that our state’s economy was slowing down again. In his report, Dr. Walden said the NCSU Economic Index was not “flashing recession” but did indicate a less upbeat year than what was thought four months ago.
Walden bases his NSCU Economic Index on a number of key criteria including weekly unemployment claims, building permits issued in the state, average weekly hours of NC employees working in manufacturing and weekly earnings of all NC employees in manufacturing.
WRAL reported that the NSCU Economic Index has dropped four of the last six months. “It appears the surge in the index is late 2014 may have been temporary, and the adverse impacts of the higher-valued dollar on manufacturing and weak household income growth on spending may be taking its toll,” said Dr. Walden to WRAL.com.
We know there will always be a constant ebb and flow in our state’s economy on a short-term basis. This compression noted by Dr. Walden may be a result of our cold weather winter especially impacting building projects and permits across the state.
It is the long term economic strategies that deserve our time and attention.
Over the course of the past seven years, our state has been through the economic ringer and there is continuing hangover in rural North Carolina.
Two weeks ago, Volvo announced they eliminated North Carolina from their prospective list for a new billion dollar manufacturing facility – choosing South Carolina and Georgia as their top two options. The news coupled with a similar decision by Mer- cedes Benz is stinging.
While our Governor has worked to reshape the state’s economic development model with a dual public-private agency, there is a sense of floundering in our efforts to recruit new industry and commerce to North Carolina. There is very little clarity in our economic development efforts. Over the past three years we haven’t been successful in developing a recruitment strategy. We haven’t defined our goals and objectives.
There is a lack of vision in the State Legislature when it comes to economic growth and development policies. The Republican leader- ship has been more focused on a conservative social agenda than working with the Governor to develop a comprehensive plan for our state’s future economic success.
I am very concerned that the State Legislature has not yet passed a comprehensive economic development incentive plan. In rural Southeastern NC, economic incentives have been a successful tool in recruiting new industry and jobs to our region. Incentives are critical when recruiting business and industry to our state. I understand the conservative’s argument that the state shouldn’t be in the business of picking winners and losers. But the fact of the matter is that South Carolina and Georgia, both states run by conservative Republican governors and legislatures, are eating our lunch right now.
We need to have an economic development policy that includes incentives allowing North Carolina to compete on a regional and national basis. There is no way to tell how many economic projects have been lost because of the uncertainty about incentives. Site selectors are hesitant to mention North Carolina to clients now because of it and we are losing businesses to other states that would otherwise consider locating here.
Throughout history our state has led the Southeastern United States on a regional basis because we have made the investments in our roads, our schools, our community colleges and our university system. We offer an appealing quality of life with a profitable business mindset. We need to com- pete with our neighboring states.
That starts with a comprehensive economic development policy that clarifies who we want to recruit and clearly identify the tools we intend to use to help recruit major employers and big business to our state. When we say North Carolina is “open for business” it shouldn’t be just a slogan, we should really mean it.