As we crest the hill that will take us into 2013, we end a year that has been a dominated by domestic politics, global economic and geopolitical challenges, and a general feeling of uneasiness. Today, the impending “fiscal cliff” looks like it could define next year, but let’s look back before predicting the future.
As predicted last December, 2012 produced steady, if slow, improvement in the national job market. Over the past 12 months, 2.65 million additional people have become employed in the United States and the unemployment rate has dropped to 7.7%. Over the past 24 months, the numbers show a drop in unemployment from 9.8% to 7.7% and 4.3 million additional people working. We are about halfway back from the loss of almost nine million jobs. Progress is slow but steady, with new net jobs every month over the past two years.
For Wake County, 2012 continued a strong rebound (See chart below). Over the past 12 months the unemployment rate has dropped from 8.2% to 6.8% and employment has grown by 4%. The 6.8% unemployment rate in October was the lowest since December 2008.
The world in which we compete for everything—jobs, investment, talent, innovation—continues to change. While the U.S. elections retained the current balance in Congress and reelected President Obama, around the world there is new leadership in many important countries, most notably China. Expect our relationship with China to receive considerable attention in the coming months and expect a few more bumps than we have experienced recently.
The Middle East experienced major changes over the last year with the Arab Spring; and with the current situation many experts expect more change in the near future. Brazil saw its economy take a major step back, India experienced a big slowdown and Europe’s unemployment rate remains in double digits. A further downturn in Europe still looms over our recovery.
In North Carolina, 2012 saw the major metro areas displaying signs of recovery, but much of the state remains stagnant and searching for jobs. In the Research Triangle Region, nearby counties like Harnett, Lee and Vance still suffer double digit unemployment rates. Statewide, North Carolina still has one of the higher unemployment rates in the nation. Newly elected Governor McCrory has many challenges to get the North Carolina economy back to where we all want.
As a proud lifelong North Carolinian, I always think the best of my state, but when compared to other Southern states, many economic indicators place North Carolina in the middle, not at the top. Wages, GDP, exports and many other indicators have been impacted by changes in the economy. Huge losses in manufacturing jobs due to efficiencies and outsourcing have impacted North Carolina more than most states. Job constrictions in information technology and biotechnology, the impacts on financial services brought about by the recession, and our lack of demonstrated natural resources in energy all combine to complicate our state’s comeback.
Next year, expect North Carolina’s economic competitiveness to dominate discussions in the Governor’s office and the General Assembly. With talent, costs, regulation, and infrastructure always named as the major factors in site selection, expect everything from education reform to tax reform to be discussed. Some of the ideas that will be proposed will benefit Wake County more than others, so this will be a very important year to stay engaged in everything that is happening.
If we can avoid the fiscal cliff, if Europe can avoid a further economic disaster, if we can begin to address the national issues that have been eroding our global competitiveness, then 2013 could be the beginning of rebuilding our national economic foundation. The same holds true for North Carolina. If we can stay focused on the economy and on improving the lives of all our citizens the year holds great promise.
National debt, limited Baby Boomer savings, increased global competition, and stagnant wages are just some of the challenges we face. The country remains ideologically divided and collaboration is always harder in times of scarcity, but 2013 seems like as good of a time as any to begin the comeback. Thomas Edison said that “We often miss opportunity because it’s dressed in overalls and looks like work.”
Greater Raleigh Chamber of Commerce
800 S. Salisbury Street
Raleigh, NC 27601
Wake County Economic Development
800 S. Salisbury Street
Raleigh, NC 27601
Southern Growth Policies Board
P.O. Box 12293
Research Triangle Park, NC 27709