Jobless rate holds steady across area
BY COREY DAVIS
Tuesday, October 16, 2018
North Carolina will continue to have robust job growth coupled with low employment going into 2019, which is a good sign for struggling areas like the Rocky Mount metropolitan area that has made modest gains economically as it continues to slowly recover from the recession, according to national economists.
Gus Faucher, PNC senior economist, said the Rocky Mount metro area that consists of Nash and Edgecombe counties has seen employment this year hold steady, unlike the job losses in 2015, 2016 and 2017.
“It isn’t like the area is doing particularly well, but at least job growth is stabilized — where before we saw employment falling,” Faucher said.
The slight improvement in the local economy can be tied to the improvement seen in the manufacturing sector of the national economy. Although there is much work that still needs to be done, Faucher reported the gap in economic activity between the metro and rural areas in the state is tightening because of the strengthening in manufacturing.
“The manufacturing industries are doing better in the national economy over the past couple years,” Faucher said. “Rocky Mount in particular has a heightened concentration of employment in manufacturing that’s much higher than the U.S. and state averages — so that turnaround in manufacturing activity has contributed to stronger job growth. It has been a big plus for your secondary metro or rural areas like Rocky Mount.”
Faucher said other industry sectors making small but noticeable gains in the Rocky Mount metro area are education, health care and retail trade. In addition, Faucher said consumer spending in the area also is gradually increasing.
“We will continue to see strong U.S. economic growth well into 2019,” Faucher said. “Rocky Mount should continue to benefit from that, so I expect the area will see not big employment gains in 2019, but I expect it to continue to see positive job growth.”
While some improvement has been made in the local economy, the area still has its economic challenges. The Rocky Mount metro’s unemployment rate of 5.9 percent in September was much higher than the state’s jobless rate of 3.9 percent and the country’s unemployment rate of 3.7 percent, which Faucher said is about the lowest it has been in almost 50 years.
The Rocky Mount metro area for the past several years has continued to have the highest unemployment rate among the 15 metro areas in the state.
“What is contributing to that is the area’s structural dependence on manufacturing,” Faucher said. “Manufacturing is becoming more productive, so they don’t need as many workers and during the recession the area saw big losses in manufacturing. Another factor is the area’s level of educational attainment is below average and there are fewer college graduates and fewer skilled workers.”
One of the things detailed in the PNC economic outlook survey was that 43 percent of small- and mid-sized business leaders in the state expect to see increases in wages. But with a higher unemployment rate, wage growth in the Rocky Mount metro is going to be slower than other parts of the country, Faucher said.
“While there are signs of improvement, wages are going to grow more slowly in the local economy — because since there is a bigger pool of available labor force, businesses don’t have to compete as much to find workers, so there is less pressure on employers to raise wages.”
He said a silver lining is that there has been a slight rise in wage growth in the Rocky Mount metro area in the past year of about 4.4 percent, which is higher than the 3.8 percent in the state. Faucher added the area’s major advantages to attract businesses continue to be its lower business cost and geographical location.
“Rocky Mount also has lower taxes, lower office rents and businesses, for example, that are looking for back-office operations would see Rocky Mount as a good location,” Faucher said. “Also, with its lower cost, there could be some distribution industries along the East Coast that might want to also expand in the area.”