Economic Perspective: Important News for the State Economy

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MARY WALDEN:

“Today’s program looks at some important news for the state economy. Mike, in recent weeks there have been several impressive announcements of new businesses and jobs coming to North Carolina. What’s behind this good news?”

MIKE WALDEN:

“I think there are several factors. One interesting part of this is that many of those announcements have been from foreign-owned firms (firms that are based in foreign countries) deciding to set up some factories or operations in the U.S. and specifically here in North Carolina.”

“The economics behind this is of course that the U.S. has been selling less to foreign countries than they have been selling to us meaning those foreign countries have been accumulating dollars. They have to do something with those dollars, and usually they end up investing those dollars. They can invest it into building factories, for example, and those operations in the U.S. So a little bit of background about where that is coming from.”

“I think the good news for North Carolina is we are still viewed as a very, very hospitable state for economic development. For example, although this is controversial, we’ve had a very significant drop in the state corporate income tax rate in just the last five years. So that helps the bottom line for businesses looking to locate here.”

“We’ve had economies, local economies, around this state that are very eager for economic development. They’ve perhaps not grown as fast as the big metros like Charlotte and Raleigh. So if you look in an area like Rocky Mount, they are just doing everything they can to be welcoming to firms coming in and setting up operations.”

“Indeed, the final point of good news about these announcements recently is that many of them have gone to these smaller metropolitan areas around North Carolina, not to the big metros. So we’ve had a lot of good news here at the end of 2017 about economic development in North Carolina. Hopefully that’ll continue in 2018.”

Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.