North Carolina’s bigger swings

People often compare the economic pace in North Carolina to the nation’s, and NC State University economist Mike Walden says there is a pattern.

“There really is, and I think there are two pieces of this. One is to recognize that we move here in North Carolina, and most states, with the nation. In fact, I’ve estimated that two-thirds of the pace of our growth is tied to the national growth rate. There are only a handful of states — for example, North Dakota (and) West Virginia, where energy is dominant — … where they are going to go with their own drummer.

“So that’s point Number One: that North Carolina is going to generally rise or fall with how the national economy is rising or falling.

“That said, though, we tend to have a more volatile pattern. And I’ve actually looked at this in the recent business cycle to confirm it. You can clearly see before the recession began in 2008, North Carolina was actually growing at a slighly faster pace than the nation. During the recession, we actually grew more slowly. That is, we had a worse recession here than in the nation. And then after the recovery took hold, around about 2013 or 2014, we have then begun to grow faster.

“So we tend to have a more volatile business cycle. I think it primarily is due to the fact that we are a manufacturing state: 19 percent of our gross domestic process is based in manufacturing. It’s 11 percent for the nation. Manufacturing has always been a more volatile industry. So I think that is the main reason why North Carolina has more of this up-or-down, boom-or-bust, economy.”